EUROFER Steel Market Outlook 2011 to 2012

Output in the EU steel using industries grew by almost 7.5% y-o-y in the 3rd quarter of 2010, the same pace of improvement in activity as registered in the 2nd quarter of the year. Exports remained the key driver for growth, but also domestic demand in the EU showed encouraging signs of improvement, whereas the boost from stock replenishment tapered off.

At the country level, the performance of Germany and Sweden remained particularly buoyant, much in contrast with the still depressed situation in Spain, whereas also Belgium appears to be lagging the general rebound seen across the EU.

Estimates for Q4-2010 signal continued growth in output of well over 5% y-o-y.

On balance, the SWIP index is forecast to have risen 5.2% in 2010, again beating previous projections.

The outlook for 2011-12 is rather positive. Investment in machinery and equipment is seen strengthening in the EU, whereas even construction investment is expected to show slight growth. Exports will continue to contribute to activity growth, helped by a relatively weak Euro. With end-user activity well on track for sustainable improvement, the SWIP index is projected to grow by slightly more than 4% in 2011 and almost 3.5% in 2012.

Source: EUROFER - European Confederation of Iron and Steel Industries
Website: http://www.eurofer.org/

For full report, see attachment.