Eurofer slashes outlook for European steel consumption

Steelmakers’ association Eurofer has drastically cut its forecast for EU steel demand growth due to soaring energy prices, ongoing global supply chain disruption and the Ukraine war shock.

Apparent steel demand is now seen contracting 1.9% year-on-year in 2022, after a 15.2% y-o-y jump in 2021. In its previous forecast issued in February, before the Russian invasion of Ukraine, Eurofer projected a 3.2% demand growth this year.

The biggest fall in demand should be seen in the second quarter, after which the market should stabilise and then start recovering going into 2023, Eurofer indicates.

If the outlook is confirmed, 2022 will be the third year of apparent steel consumption contraction registered during the four years between 2019 and 2022. “In the current context, amid a worsening energy crisis and shortages in raw materials, we cannot exclude a new recession or a stagflation scenario,” Eurofer director general Axel Eggert says in a note sent to Kallanish.

“Apparent consumption is set to recover in 2023 [by 5.1%], but the overall evolution of steel demand remains conditional on very high uncertainty which is likely to continue to undermine demand from steel-using sectors,” the association notes.

EU imports last year jumped back to the record levels seen in 2018. Over full-year 2021, imports of finished products jumped 35% y-o-y, after the drop of 15% seen in 2020.

“Throughout 2021, the EU’s total trade deficit amounted to 1.5 million tonnes,” Eurofer says. This figure includes semi-finished steel. The biggest trade deficit was recorded with Russia, at 593,000t. Now, trade with Russia is almost completely halted due to the European Commission’s ban on imports of Russian finished products and sanctions on most Russian steelmakers.

Emanuele Norsa Italy