Trade Resources Industry Views Juergen Nusser Presented a Negative Outlook for The European Steel Market in 2013

Juergen Nusser Presented a Negative Outlook for The European Steel Market in 2013

Speaking at the International Steel Trade Day organized by STSG-Eurometal in Milan on April 4, Juergen Nusser, managing director of Eurometal, presented a negative outlook for the European steel market in 2013.
 
Demand fell by 9.5 percent in 2012, Mr. Nusser said, and the first signs of a recovery will be seen only in late 2013, while we will have to wait until 2014 to see a mild improvement in demand fundamentals.
 
According to Nusser, in 2012 apparent steel consumption in the EU amounted to 142 million metric tons, compared to 157 million metric tons in 2011 and 201 million tons in 2007, and in 2013 it will fall by three percent year on year to 138 million tons. This shows the existence of excess capacity, which inevitably puts pressure on prices and leads to narrower profit margins, he said.
 
Nusser showed that apparent consumption decreased by 60 million metric tons from 2007 to 2012, with 20 million mt lost in the bubble of 2007, 20 million mt due to the recession in 2008-2009 and 20 million mt lost because of a structural change which transferred purchasing power from finished steel to raw materials and from producers to end-users.
 
According to the Eurometal managing director, this means that we can only expect a maximum recovery of 20 million metric tons compared to 2012, which would lead to an apparent steel demand in the EU not exceeding 160 million tons. He said that 40 million metric tons are "gone forever" since the respective production capacity is obsolete.

The consequences for stakeholders are without alternative: the adaptation of capacity to the future market structures is unavoidable. This evaluation demands a reduction of at least 40 million metric tons (or 20 percent), Nusser added, but the necessary cut could even reach 60 million tons (or 30 percent) taking into account the capacity newly implemented since 2007.

Source: http://www.steelorbis.com/steel-news/latest-news/nusser-steel-capacity-cut-of-at-least-40-million-mt-needed-in-eu-751202.htm
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Nusser: Steel Capacity Cut of at Least 40 Million Mt Needed in EU
Topics: Metallurgy