Challenges lie ahead for Iberian steel: industry executives

The steel sector in the Iberian peninsula will face various challenges in the coming year, industry executives at the EUROMETAL Steel Net Forum in Porto, Portugal, said last Friday. While ongoing issues such as lackluster demand and over-capacity are expected to persist, other challenges are likely to arise in the coming year, they said.

Mergers and acquisitions, plus anti-dumping measures are expected to be prominent in the European steel industry in 2017 but prices are not expected to increase sharply, speakers said. Carlos Vieira of Spain’s Gonvarri Steel Services told attendees that any consolidation would lead to the reduction of sourcing options for steel distributors, an issue which could be made worse by a spate of protectionism barriers expected next year.

The ongoing issue of Chinese over-capacity was, once again, a topic of discussion. Jens Lauber, ceo Tata Steel Distribution Europe and president of EUROMETAL, said: “overcapacity in China is a key factor to the destabilisation of the EU market,” adding that “EU producers are clearly in survival mode.”

The idea of generating value, as mentioned by other speakers at the meeting, was reiterated as a key strategy in improving profitability in the midst of the challenges ahead. “Europe needs a complete and strong value chain, with all participants to play their roles for value generation,” Lauber said.

Economic challenges are also looming, participants said. Fernando Pinto, president of Açomefer, the Portuguese association of wholesalers of steel, metals and tools, noted that the growth of Spanish and Portuguese GDP was positive in 2015, but that 2016 forecasts are negative, with Spanish growth receding to 3.1% for 2016 and Portugal’s expected to decline by 1.3%.

A further 2.2% decline is forecast for Spain in 2017, while an uptick of 1.6% is expected for Portugal in 2017.

Erica Sesay, PLATTS