EU Steel Distribution: cautious optimism amid stable market conditions as 2024 ends
The European Steel Distribution sector remains cautious and prepares for the challenges of early 2025.
The EUROMETAL Sentiment Survey for December 2024 reveals a largely neutral to mildly optimistic market sentiment, with respondents expecting stable stock levels, steady current activity, and modest improvements in future activity and prices. This suggests the steel and metals distribution sector is ending the year on a positive yet stable note, with confidence in the market’s trajectory heading into 2025.
Assessment of Current Activity
Responses for December 2024 reflect a continuation of trends observed in previous months, with activity levels remaining below the neutral line. This suggests that the sector continues to operate cautiously, with no signs of significant improvement.
However, compared to October and November, responses indicate a slight stabilization, suggesting that the current activity level has settled into a consistent, albeit subdued, pattern.
Future Activity Forecast
The sentiment for December 2024 is above the neutral line, suggesting cautious optimism for the next quarter.
In contrast to the months of August, September and October, where responses dipped below neutral, indicating some concerns or market uncertainties, December reflects greater confidence in upcoming activity.
Bubble size in December is moderate, suggesting a mix of opinions, but with the majority leaning toward a positive outlook.
Stock Position Forecast
Stock position responses for December show little change, reflecting a continued conservative inventory approach. Respondents indicate no significant plans for aggressive restocking, preferring to align stock levels with lower demand expectations. This reflects distributors’ cautious stance as they enter 2025 amid uncertain market conditions.
Price Development Expectations
December 2024 exhibits a clear upward tilt above neutrality, signaling expectations for moderate price increases in the coming months. The upward trajectory in December sentiment could reflect improving market conditions, such as stronger demand, reduced supply chain pressures, or other positive economic signals.
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This analysis is based on the EUROMETAL Sentiment Survey, reflecting the opinions of 210 participants for December 2024. Interested in our Sentiment Tool? Contact us.
Europe’s crude steel production increased
The European Union produced 11.3 million tons of crude steel in October, an increase of 5.5% compared to the same month last year.
The European Union produced 11.3 million tons of crude steel in October, an increase of 5.5% compared to the same month last year. In the January-October 2024 period, total crude steel production reached 109.3 million tons, an increase of 2.1% compared to the same period last year.
Other European countries produced 3.4 million tons in October 2024, a decrease of 6.2% compared to October last year. In the first ten-month period of the year, total crude steel production amounted to 36.5 million tons, an increase of 6.3% compared to the same period last year.
Germany, Europe’s largest economy, continued to play a leading role in the sector. Germany produced 3.2 million tons in October, an increase of 14.7% compared to the same month last year. In the January-October 2024 period, production totaled 31.6 million tons, an increase of 5% compared to the previous year.
Sidenor buys recycling company to support decarbonization efforts
Spain-based steel producer Sidenor Group has announced that it has acquired industrial scrap and waste recycling company Eplus based in Barcelona as part of its decarbonization and sustainability efforts.
Having facilities extending over 2,000 square meters, Eplus processes materials such as ferrous and nonferrous metals, paper, cardboard and plastics in order for steel and other industries to reuse them in their operations.
Earlier this year, Sidenor completed the acquisition of Miguel Martin to secure scrap supply, as SteelOrbis reported previously. Also, the company had purchased Aguilar Metal Recycling in 2022.
Fitch Ratings expects apparent steel consumption to increase in 2025
International credit ratings agency Fitch Ratings has issued its latest global steel sector outlook report for 2025.
Accordingly, Fitch has revised its global steel sector outlook for 2025 to neutral in line with its expectations of a slight improvement in the steel industry following sluggishness in 2024, largely based on a balance in the Chinese steel market, decreasing costs and a mild increase in steel prices and producers’ margins. Also, in 2025, apparent steel consumption is expected to rise by single digits with the support of growth in India, stable demand from China and a recovery in both the US and the EU.
In the meantime, the agency predicts that steel production in China will keep declining by single digits next year, with demand expected to be almost stable. However, margins of Brazilian, Turkish, European and Indian steelmakers are likely to recover amid a decrease in steel imports from China.
Looking at other markets, India is forecast to maintain its position as major growth market owing to increases in its production and consumption, while Brazilian steel industry should improve due to a decrease in imports and positive demand growth. Furthermore, the European steel industry is expected to show a slight recovery following several years of downturn, while the US steelmakers’ margins will continue getting back to normal levels.
Fitch also added that possible trade measures hinted by the new US administration and an increase in protectionism in other regions will likely affect the global economy. Additionally, the US increasing tariffs on goods from China will increase pressure on steel consumption in China and have negative impact on global markets.