EUROMETAL foresees slow steel distribution recovery from May

EUROMETAL, the European association for steel distributors and processors, expects that a slow recovery will start in May across the continent. It still predicts 2020 to be the worst year for the sector in the last 60-70 years.

The association notes that for stockholders the drop in demand since the beginning of March has been around -20-60%. A recovery is expected to begin in May, and while orderbooks are not comfortable, they are also not considered poor. “More recent sales forecast for stockholders are close to 55-65% compared to budgeted sales plans (more optimistic in north-western and north-eastern Europe versus southern Europe),” the association tells Kallanish.

Steel service centres (SSC), on the other hand, expect the second quarter to be better than Q1, but confirm the first half of 2020 will be very challenging overall. During the last six weeks SSCs operated at reduced capacity, with those more linked to the automotive sector only working at 20-25% utilisation.

Looking forward, the construction sector is expected to get a boost from the resumption of activity and the seasonality factors. The automotive sector’s outlook remains uncertain as production volumes are hard to foresee.