European steel body Eurofer has cut its 2014 European Union steel demand growth forecast to 2.6 percent and said next year’s growth would be similar, hurt by surging imports and slowing growth.
In July, Eurofer, whose members include ArcelorMittal , ThyssenKrupp and Voestalpine , had forecast demand growth of 3.7 percent for this year and 3 percent for next year.
“Difficult business conditions for the EU steel sector will continue as long as demand growth remains dull and imports remain on an elevated level,” said Eurofer’s new director general Axel Eggert.
The industry body said the rise in EU steel demand has been mostly taken up by imports, which grew an annual 26 percent in the second quarter, with EU mills losing out to third country suppliers.
On the supply side, Eurofer sees total output growth at 2.3 percent this year, and at a similar level next year.
The European steel market is still struggling to recover from the effects of the financial crisis, with demand down some 25 percent since 2008, leaving the market heavily over-supplied and struggling to absorb rising imports.
“In 2015 … a moderate strengthening of demand is to be expected. However, imports are to remain on a high level, thereby exerting severe margin pressure on EU steel mills,” said Eggert.
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