Demand for steel in the European Union is predicted to grow in 2018, but rising consumption could be accompanied by higher prices.
The latest market report by Eurofer, the European Steel Association, revealed that EU28 steel consumption increased by 1.1% year-on-year in the third quarter of 2017. European steel producers saw domestic deliveries rise by 4.4%, while imports from outside the EU fell sharply during the period.
With the manufacturing and construction sectors in the EU well positioned for growth during 2018 and 2019, Eurofer predicted still higher demand for steel in the coming months.
CRU, the commodities analyst, also forecasted strong demand for steel in 2018 on the back of an improving economic picture in Western Europe, estimating a 2.3% rise for long products and a 1.4% increase for flat products.
Should CRU’s total predicted consumption of 125Mt of finished steel prove to be accurate, it would be the highest level since 2011.
However, it suggested that the additional demand would be accompanied by rising prices, in part because many European mills finished 2017 with unusually low inventory following strong sales in the latter part of the year.
Trade barriers against a number of low-priced non-EU steel producing nations (along with policy changes in China) were likely to further restrict supply, helping to support the price of European made steel - even as mills increased output, CRU concluded.
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