The outlook for steel in 2019-2020 published on Tuesday 7 May by Eurofer, the European association of steel producers, is undermined by the impact of US sanctions on steel and the uncertainty caused by Brexit.
Despite an improving market in 2018 (+3.3%), the association focuses mainly on the negative effects of the increase in steel imports resulting from the tariff sanctions imposed by Washington.
Indicating a "slight" decrease in forecasts compared to 2019, the association points to European safeguard measures that are a priori insufficient to prevent the diversion of steel exports to the European market that American sanctions generate (see EUROPE 12229/25, 12185/4). According to Eurofer, EU producers are "caught between upward pressure from imports and a depressed domestic market".
Eurofer emphasised that the gradual liberalisation of these measures, i.e. the annual 5% increase in the quota level as from 1st July 2019, is "out of step" with the situation of European producers and a world market still 550 million tonnes in overcapacity, according to OECD figures.
"Imports increased by 12.6% and domestic deliveries by only 1.7%", pointed out Axel Eggert, Director-General of Eurofer.
The degree of uncertainty surrounding Brexit and the evolution of the transatlantic relationship "clearly has the potential to lead to a negative confidence shock and the postponement of investment decisions", the document finally stresses. Link to the Eurofer report: https://bit.ly/2H13mhO (Original version in French by Hermine Donceel)