|
|
|
| NEWS |
|
|
|
| Welcome to Wanjoo Metals |
HOME > CUSTOMER CENTER > NEWS |
|
|
|
|
| TITLE |
Europe steel output cuts loom, demand outlook dims |
| WRITER |
administrator |
DATE |
2010-06-14 17:14:01 |
|
|
|
Europe steel output cuts loom, demand outlook dims
Mon. 14. 2010
European steelmakers are braced for output cuts in the third quarter as restocking slows and the demand outlook dims.
The euro zone's recent debt problems have shaken the steel industry, which is still recovering from the economic downturn that stripped demand in key steel-consuming industries like auto and construction.
The demand slowdown is also visible in top steel producer China, where prices have fallen more than 10 percent since a peak in mid-April. Some Chinese mills are scaling back output as the government tries to cool the economy.
The world's top steelmaker ArcelorMittal said last week that it was considering idling three blast furnaces in Europe to meet lower demand.
Analysts say other producers might follow suit as historically the third quarter tends to be weaker than the second quarter, although this is not the sole reason.
"(An output cut) reflects the end of destocking in Europe," said Macquarie analyst Colin Hamilton. "There is a bit of a seasonal slowdown, so a combination of events suggest demand for steel production will pull back in the third quarter."
Bank of America said ArcelorMittal's move on output, while trying to limit a price impact, "also suggests that the near-term demand outlook may be softer than originally envisaged".
The latest steel market sentiment survey by The Steel Index (TSI) published this week shows the number of companies in Europe (and also globally) expecting an increase in demand over the next three months has fallen sharply.
Only 7 percent of European companies now expect higher demand, down from 13 percent in the previous week. The number of companies in Europe expecting price rises has also fallen to 14 percent from 26 percent.
Austrian steelmaker voestalpine was among the latest to express concern, despite its strong earnings performance in the first months of the year, warning the upswing could be short lived.
"The decisive role in the answer to this question will be the development of the economic situation in Asia, primarily the sustainability of the uptrend in China," the company said.
TROUGH
China's steel consumption is expected to slow down after sharp increases in the first four months of the year.
The country's steel sector, the world's largest, is facing severe overcapacity and the government has vowed to curb overheated growth in the industry.
China's official purchasing managers' index (PMI) released last week fell in May to 53.9 from 55.7 in April, just below market expectations but still the 15th straight month above the threshold at 50 that separates expansion from contraction.
The country's top steelmaker Baosteel has cut prices of hot-rolled coil (HRC), a key steel product used by carmakers, by about 10 percent for July.
Baosteel Group's president Xu Lejiang also said steel consumption from the auto, housing and house appliance sectors would be sluggish in the third quarter.
Analysts see further scope for prices to fall. In the Black Sea region, prices of long steel, mainly used in construction, have fallen from above $650 a tonne in early April to $470-480 a tonne last week.
"China-EU steel price arbitrage will impact steelmakers' pricing power in Europe," according to analyst Andrew Snowdowne of UBS. "This will make it difficult for EU producers to raise prices into Q4'10."
Source from www.reuters.com |
|
|
|
|
|
|
| [ L I S T ] |
|
|
|
|
|
|
|
|
|
|
|
|
WanJoo Metals All rights reserved. |
|
TEL : +82-2-585-2581, 2571, FAX : +82-2-585-2587, 8799 |
|
FL.2 DaedeokPlaza Bldg, 206, Geumgok-Dong, Bundang-Gu, Seongnam-Si, Gyeonggi-Do 463-480, Korea |
|
|
|
|
|
|
|
|
|
|
|
|
