Apparent consumption of finished steel in the EU-27 is expected to slip in 2012 by more than 13 million tonnes (8.7 percent) according to MEPS (International) Ltd. The banking crisis created tight credit restrictions. Steel prices were in decline. Customers reduced their inventories and were not prepared to order significant quantities of material for the fear of lower prices in the future. High rates of unemployment and subdued household consumption added to the difficult market conditions.

A modest increase in demand is anticipated in 2013. A degree of inventory building is expected and price increases are a real prospect.

In 2011, crude steel output expanded to 177.7 million tonnes from its low point a year earlier. Sovereign debt problems, suffered by many member states, started to reduce economic activity and with it steel demand in 2012.Economic growth in the short term is likely to be sluggish. Public sector finances are expected to be tight for some years ahead. Private sector borrowing will be restricted as the banks try to shore up their balance sheets. Investment in infrastructure projects will be limited. Any upturn in the consumer goods sector is forecast to be quite modest.

MEPS expects the outturn for 2012 production of crude steel to be just below 170 million tonnes. Slow but steady growth is anticipated to 2016. A figure of 188.5 million tonnes is anticipated at the end of the forecast period. Pig iron outturn will follow a similar pattern.

Source: MEPS