Eurofer cuts European steel forecasts as demand recovery lags
Adds detail and quotes
By Matteo Allievi
July 25 (Reuters) -The European steel market recovery this year and next is likely to be weaker than previously expected, industry group Eurofer said on Thursday, downgrading its outlook for a third time this year on faltering demand.
Axel Eggert, general director of Eurofer, said that the impact from reduced consumer demand on the sector's finances threatens its investment capability.
"That's a problem as we have significant infrastructure investments to make in Europe for the transition to decarbonisation. We have to execute over 30 billion euros of capital investment by 2030," Eggert told Reuters.
After a 3.1% slump in apparent steel consumption in the first quarter, Eurofer said it was cutting its 2024 growth forecast to 1.4% from 3.2% and its 2025 projection to 4.1% from 5.6%.
Apparent steel consumption measures output of steel producers plus net imports minus net exports.
"Moderate quarterly improvements are expected throughout 2024, yet volumes will remain below pre-pandemic levels. The overall evolution of steel demand remains highly uncertain," the European Steel Association said.
Eurofer also cited flagging construction industry along with the impact of higher for longer interest rates on manufacturing.
Automotive output fell almost 1%, with the negative trend expected to continue across the year, it said.
European steelmakers SSAB SSABa.ST and Acerinox ACX.MC on Wednesday made downbeat predictions for European demand in the second half of the year.
Reporting by Matteo Allievi
Editing by Jason Neely and David Goodman
Related Assets
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
