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Belgium Metals Report Q4 2009Published by: Business Monitor International Published: Oct. 1, 2009 - 44 Pages Table of Contents
AbstractThe Belgian steel industry was one of the world’s worst performers in 2009 as it became a victim of theEurope-wide recession, but there are signs of cautious optimism as ArcelorMittal restarts some of thecapacity closed earlier in the year, according to BMI’s latest Belgium Metals Report.In H109, Belgian crude steel production fell 66% year-on-year (y-o-y) to 2.07mn tonnes. Althoughmonthly output in June - at 384,000 tonnes - was 63% above the February low-point of 235,000 tonnes,it was still down 63% y-o-y. Moreover, output is at lows not seen for decades and was down 10% on thelevels seen in March and April, despite witnessing a brief surge. BMI attributes the modest 2009 upturnto small purchases for restocking rather than a recovery in demand for steel products. In late July, ArcelorMittal restarted a blast furnace it had idled at Ghent for four months. The restart atone of two furnaces at the site came more than two weeks ahead of schedule. The move came amid signsof a revival in the market as France and Germany declared themselves to be out of recession. However,our outlook for the Belgium economy remains bearish and this will be reflected in domestic steel outputlevels. Despite a further downward revision of our real GDP forecast to -3.7% in 2009, consumerspending is holding up relatively well. We see the latter declining by just 1.4% in real terms this year,although there is a danger that renewed job losses could send confidence tumbling once more. Despite the resumption of operations at ArcelorMittal’s Ghent unit, BMI forecasts a 45% drop in crudesteel output due to a fall in hot-rolled production downstream, particularly flats which will be depressedby the effects of the collapse in the automotive industry, with car scrappage schemes throughout Europehaving only a modest and temporary effect on demand for Belgian steel. While Belgium is unlikely to seethe kind of monthly output reported in Q1, any growth will largely be the result of inventory building. Actual demand growth is not expected until Q210, with 2010 output set to rise by around 11% above2009 levels, although this is still a low level. We do not believe that annual steel production will exceed 9mn tonnes again until 2013. The decline inoutput is related to the collapse in the export market, which is set to fall 38% to 13.6mn tonnes in 2009. At the same time, the import market will fall by around 43% to just under 9.0mn tonnes. The value of netexports will fall from US$10.2bn to US$5.4bn. Aluminium consumption, which is heavily influenced bytrends in the automotive industry, is set to fall even faster than demand for steel in Belgium, with themarket forecast to fall by 56% y-o-y to under 230,000 tonnes, although it should recover to around380,000 tonnes by 2013. Get Full Details About This Report >> |
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