Eurofer lifts steel demand outlook but uncertainty looms

European steelmakers’ association Eurofer says the uncertainty created by the second Covid-19 pandemic wave is set to impact apparent steel demand further in the fourth quarter.

According to the association’s latest outlook published Wednesday, apparent steel demand in Europe is now set to fall by -14.6% year-on-year in 2020. Back in August, the association issued a more negative outlook of -16.6%. This should recover in 2021 by over 13% on-year, meaning it will still remain below 2019, pre-coronavirus levels.

For real consumption, Eurofer expects it to fall by -11.5% this year and recover 9.3% in 2021, Kallanish notes.

Alessandro Sciamarelli, director for market analysis at Eurofer, notes that a rebound in market confidence was tangible in June and July, but a further slowdown could be seen in October due to the second wave.

Q2 should have marked the trough of the negative cycle for end-use sector performance, but the recovery will be slow nonetheless, Eurofer points out.

This year all of the main steel using sectors will register important drops in activity: construction will be down -3.6% y-o-y and automotive by -20.6% y-o-y. Next year the construction sector will jump back by more than what it lost this year, thanks to the support of public investments. As for the automotive sector, the rebound will be strong but still not enough to recover the negative impact of 2020.