Steel consumption in the EU is forecast to face its third decline in four years in 2022, as regional steel association Eurofer forecasts, as a result of the quarterly decline in demand forecast in the second, third and fourth quarters.
Eurofer forecasts a 1.7% decline in EU apparent steel consumption throughout 2022. However, this forecast represents an upward adjustment from the previous 1.9% decline.
“The gloomier outlook for the steel market for the rest of 2022 is consolidating and is likely to have spillover effects into 2023,” said Eurofer CEO Axel Eggert.
Steel consumption in the EU should recover by 5.6% in 2023, but steel demand remains subject to high uncertainty, which will last at least until the first quarter of 2023, depending on the development of the Russian-Ukrainian situation and its consequences. in global supply chains, although this is currently unforeseeable, notes Eurofer.
Despite continued supply chain challenges, steel production in EU steel-using sectors posted a fifth consecutive year of year-on-year growth in the January-March 2022 quarter (up 4.9%), picking up speed compared to fourth quarter of 2021.
Such dynamics is due to a combination of positive changes in the construction, engineering and transport industries, on the one hand, and a sharp drop in the production of cars and household appliances, on the other.
Figures for the first quarter of 2022 do not yet reflect the impact of Russia's special military operation in Ukraine (which began on Feb. 24), but the latter certainly affected the outlook for the rest of 2022.
In 2022, the output of the steel industries is expected to continue to grow, but as a result of the rapidly deteriorating global industrial and economic outlook, Eurofer has lowered its annual growth rate to 1.1%, compared to the previous forecast of 2%.
These factors, combined with current and worsening supply chain problems, are expected to lead to either very modest growth or even a decline in production in EU steel-using sectors over the remaining three quarters of 2022, according to Eurofer.
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