European Union steel demand is forecast to ebb in 2012 but then pick up in 2013, buoyed by resilient end-customer demand despite recession concerns, the European steelmakers' federation, or Eurofer, said Friday.

Eurofer foresees "only a very mild reduction in demand" in 2012 and expects real and apparent steel consumption to strengthen again in 2013, its Director-general Gordon Moffat said in a statement.

Eurofer, which represents steelmakers such as ArcelorMittal (MT) and ThyssenKrupp AG (TKA.XE), said it expects EU real demand to dip 0.6% in 2012 to levels seen at the beginning of 2011 and then rise 2% in 2013 as the steel demand from various sectors improves during the course of 2012 and into 2013. EU real steel demand rose 6.6% in 2011.

"Companies will remain cautious for the time being, but there is no indication that industrial orders will fall off a cliff," Moffat noted. "Order backlogs are quite strong. The outlook for most steel-users is relatively benign."

Moffat said it is hard to gauge when confidence will return to the market, but he said he was encouraged by improving foward-looking indicators such as industrial confidence and manufacturing purchasing managers index. They "appear to have taken a turn for the better in recent weeks," he said.

Meanwhile apparent steel consumption is forecast to drop 2% to 156 million metric tons in 2012 after rising an estimated 7.2% to 159 million tons in 2010. EU apparent steel demand is forecast to rise 2.9% to 160 million tons in 2013, the steel body said.

-By Alex MacDonald, Dow Jones Newswires; +44 (0)20 7842 9328; alex.macdonald@dowjones.com

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