Eurofer has revised down its EU apparent steel consumption forecast for 2024 to 1.4% growth – from 3.2% – amid a steeper-than-expected downward trend. Steel-using sector output is now seen declining 1.6% – versus 1% – while imports’ share in EU steel consumption remains at a historically high 27%, Kallanish notes.
This comes after first-quarter apparent consumption slumped 3.1% on-year to 31.9 million tonnes. Although moderate quarterly improvements are expected throughout 2024, volumes will remain below pre-pandemic levels, with the overall evolution of steel demand remaining highly uncertain, Eurofer observes.
Domestic deliveries contracted 5.8% in Q1, after a moderate, 1.3% increase in the preceding quarter. Imports continued increasing, growing 12% in Q1.
Despite proving resilient in 2023, EU steel demand is suffering from “a worsening combination of uncertainties”, including high energy prices, persistent inflation, economic uncertainty and geopolitical tensions, Eurofer notes. These are exacerbated by a manufacturing crisis affecting the largest steel-using sectors.
Steel-using sector output fell 1.9% in Q1 as a result of a continued downturn in the construction, mechanical engineering, domestic appliances and metalware sectors. Following a strong 2023, automotive output also entered negative territory, a trend expected to continue throughout 2024, with Eurofer revising down the sector’s 2024 forecast to 3% contraction versus the previous 0.4% contraction forecast.
The overall steel-using sector output growth forecast for 2024 was revised down from the previous 1% contraction due to the second consecutive year of recession forecasted for the construction sector, persistent geopolitical tensions, and the lagged impact of high interest rates on manufacturing.
“The situation requires urgent action at EU level, as both European steel production and related clean tech value chains are at risk,” says Eurofer director general Axel Eggert. The association looks forward to the European Commission delivering a European Clean Industry Deal with a Steel Pact at its core, he adds.
Adam Smith Poland