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Romania Metals Report Q3 2009Published by: Business Monitor International Published: Jul. 7, 2009 - 47 Pages Table of Contents
AbstractRomanian metallurgical industries are seeing little in the way of revival, with BMI’s latest RomaniaMetals Report expecting a steep decline in output, led by a collapse in demand for flat products amid thecrisis in the domestic and foreign carmaking industry, as well as a sharp slowdown in the real estatesector.In the first four months of 2009, crude steel output was down 65% to 685,000 tonnes, with output in Aprildown 3% month-on-month (m-o-m) and 61% year-on-year (y-o-y). All producers were operating at wellbelow capacity. BMI forecasts a 27% fall in crude steel output in 2009 to 3.69mn tonnes, with hot rolledproduction falling 30% to 3.38mn tonnes, due in large part to a collapse in flats. A major contributor tothe decline in flats production is the car industry, with Renault’s Romanian Dacia subsidiary calling thesituation a ‘state of emergency’ amid a sharp decline in both exports and domestic sales. A slow recoveryis expected from 2010, but BMI does not envisage crude steel output exceeding 2008 levels until 2013when production should total around 5.23mn tonnes. However, it could take until 2015 or 2016 for thesteel industry to recover to the pre-recession peak in 2007, although this is contingent on sustained growthin demand and the retention of existing capacities.In terms of products, heavy plate will be the worst affected segment with output expected to fall 26.4% to177,000 tonnes due to the slowdown in the global shipbuilding industry. Romanian shipyards areexpected to record one of their worst years in 2009, having received no orders in H1. However, shipyardsare working at near full capacity due to orders placed in previous years. Many shipyards are alsochanging their strategies with Damen Galati seeking orders for military and luxury ships and ConstantaShipyard and Daewoo Mangalia focusing on ship repairs. BMI expects the cut in orders in 2009 to havean impact on heavy section production in 2010, with the decline in output set to continue. An upturn isexpected from 2011 but we do not expect a return to 2008 production levels over the next five years. According to BMI forecasts, a collapse in real estate will lead to a 25% fall in rebar production to justunder 588,000 tonnes in 2009. However, a quick rebound should ensure that the segment performsstrongly in 2010 and by 2013 output should be approaching 900,000 tonnes, an increase of 15% over2008 levels. The strength of growth in Romanian rebar production will be bolstered by both itscompetitiveness on European markets as well as domestic demand. Romania’s aluminium industry is also set to see a sharp downturn in output. Romanian aluminiumproducer Alro produced 56,196 tonnes of primary aluminium in Q109 (down 20% over Q408) and 6,076tonnes of flat rolled products (up 0.5%). Alro plans to produce 201,225 tonnes of electrolytic aluminiumin 2009, down 24% over 2008 with an operating rate at around 70%. This reduction is largely related tothe shutdown of one pot line, implemented at the end of 2008. BMI believes that Alro may suffer a biggerfall in output, based on our pessimistic outlook for key export markets and the poor performance of thecar industry, a major aluminium consumer. BMI estimates that primary aluminium production growthwas flat in 2008, totalling around 263,000 tonnes. A 30% fall is expected in 2009, with output down tojust under 171,000 tonnes. A key contributor to the decline will be the automotive sector, but carassembly will also secure the sector’s revival, with output set to reach 290,000 tonnes by 2013 as Fordboosts output at its recently acquired plant in Craiova. Get Full Details About This Report >> |
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