EU real steel consumption will fall at the “…unprecedented rate” of -13.6% on-year in 2020, recovering in 2021 by 9.7%, says European steelmakers’ association Eurofer.
Even after Covid-19 lockdown measures are removed, economic growth and global trade will remain weak until 2021, hampering EU investment. This will be offset partially by continued resilience in construction, whose output will contract less than other sectors.
In the first quarter total EU steel-using output dropped by -7.2% on-year as a result of the pandemic-related lockdown exacerbating the existing negative trend. Only the Czech Republic and Poland saw output growth.
EU real steel consumption fell -5.8% on-year in Q1 to 38.6 million tonnes, after an -8.1% drop in Q4 2019. Continued economic slowdown over the second half of 2019 and widespread business uncertainty, as well as decreasing steel intensity were the key drivers.
Apparent consumption is expected to fall -16.6% in 2020, and then to rebound by 14% in 2021, Kallanish notes.
It fell -12% on-year in Q1, the fifth consecutive quarterly fall, to 37.6mt. The Covid-19 pandemic was only partially responsible. This compounded existing factors such as business uncertainty, weak manufacturing demand and continued stock reduction to record lows.
Third-country imports declined -20% in Q1 as a result of the safeguard measures applied by the EU. Domestic deliveries by EU steel suppliers fell -8% in Q1. The pandemic had a limited impact on data, but is set to produce even bigger business disruption and to depress steel demand by an unprecedented extent, Eurofer says.