Europe’s steel distributors see up to 60% demand drop due to virus

European steel distributors have seen a demand decline of as much as 60% due to the coronavirus pandemic, according to trade group EUROMETAL.

Since the beginning of March there has been a widespread decline in steel demand across Europe following pandemic-induced shutdowns, with members of the steel, tubes and metals distribution sector reporting a consumption slump of between 20% and 60%, the trade association said in a note Thursday.

Activities have been “deeply impacted” by the pandemic, it added.

“The most impacted sectors are construction, machines building, manufacturing … Distributors are using furlough schemes when available, depending on local options,” EUROMETAL said.

Looking forward, the trade group said its members expect a step-by-step recovery to begin at the start of May and that most recent sales forecasts would be around 55-65% of budgeted sales plans, with Northern European market conditions more favorable than those expected in southern Europe.

European automotive shutdowns, resulting in assembly line closures or large decreases in demand, had impacted the order books of most steel service centers, it added.

The group said automotive requirements made up around 50% of the market share in Europe for processed steel products such as slit coils, blanks and sheets and that depending on each steel service center’s exposure to that sector, then a reduction in operations of 20-25% up to 80-85% of capacity had been seen.

The current year “will remain one of the worst years that distributors, steel service centers and traders have faced during the last 60-70 years,” it said.

EUROMETAL members comprise steel distributors, service centers and traders responsible for the supply of 80 million mt of steel, tubes and metals to EU end-users and account for more than 60% of the supply in steel and tubes to more than 1 million end-users in the EU manufacturing and construction-related sectors.

— Len Griffin