EU steel-using output slows, acceleration in 2024: Eurofer

EU steel-using sectors’ output growth is expected to slow to 0.3% on-year in 2023, following 3.1% growth in 2022, but will then accelerate to 2.3% in 2024, according to Eurofer. Construction and tubes will be the major drags this year, with automotive the only bright spot.

The main drop in output this year is anticipated in the second quarter. The projection is nevertheless an improvement on the 0.6% output decline forecast for 2023 in the previous outlook, Kallanish notes.

EU steel weighted industrial production in the fourth quarter last year rose 2.5% on-year, despite the Ukraine war and its related disruptions, as well as soaring energy prices, thereby showing unexpected resilience, Eurofer points out.

Construction, mechanical engineering, and other transport output rose 4.8%, 7.9% and 7% respectively in full-year 2022, while domestic appliances output dropped 5%, according to the EU steel weighted industrial production (SWIP) index.

“While the war in Ukraine initially impacted output in sectors to a limited extent, up to the third quarter of 2022, the situation in the fourth quarter of 2022 considerably worsened due to persistently high energy prices and the quick deterioration of the general economic outlook, despite the considerable decline in the TTF gas price index in recent months,” says Eurofer.

“The ongoing economic uncertainty is set to continue taking its toll on growth also over the next few quarters. However, the toughest period for the EU industry appears to be over (notably, the last quarter of 2022 and the first quarter of 2023). Nonetheless, the combination of historically high energy prices, low demand and economic uncertainty is expected to weigh on the rest of 2023,” it concludes.

Adam Smith Poland