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Eurofer: problems of the European steel market will last until the second half of 2020

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the European steel Association Eurofer waits for a turn to growth of consumption in the steel market until the second half of 2020. And not because of rising demand from end users.

Eurofer: problems of the European steel market will last until the second half of 2020

it is Expected that apparent consumption of steel in Europe will recover in 2020 with a growth rate of 1.2 percent, mainly due to a modest restocking, and not as a result of recovery in demand from sectors that use steel. This is stated in the market watch become Eurofer.

"2019 year has been another difficult year for the steel sector, in which decreased levels of steel consumption and imports, which, although lower-level 2018 were still very high compared to historical levels," said Axel Eggert, Director General of the European Association of steel producers. "Although it is expected that some growth will return to the steel market in 2020, even these modest estimates may be too optimistic, if events take an unexpected turn".

Apparent steel consumption in the European Union in the third quarter declined by 3.1% yoy, showing a slight decrease compared with that recorded in the second quarter (of-6,7%).

"the Continuing negative trend in the demand for steel is a result of the continuing downturn in the manufacturing sector of the EU, due to weaker exports and investment, which have become more noticeable in the second and third quarter of 2019. Leading indicators suggest that the decline continued in the rest of 2019. Although with some signs of stabilization. Until the second half of 2020, a significant rebound is not expected", - stated in the review.

the Current decline in steel demand led to a drop in domestic supplies in the EU by 4% yoy in the third quarter of 2019, after declining by 3% in the first quarter. After the exceptional drop of 19% yoy in the second quarter imports declined only slightly in the third quarter (1%) and amounted to 8.8 million tons, accounting for 23.8% of steel demand in the EU.

In Eurofer he said that market conditions slightly improved from the third quarter of 2020, although the risks associated with distortion of imports and the continuing global excess capacity is likely to continue to undermine the stability of the steel market in the EU. In particular, global steel capacity continues to grow, and the gap between capacity and production in recent months has increased.

In Association expected that the real consumption levels will recover in the second half of 2020, but also stabiliziruemost at low levels in historical terms. The expected decrease in apparent steel consumption in 2019 3.3% year-over-year and continued pressure on imports, in fact, is expected to mainly cause damage to steel producers in the EU in their business performance.

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