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In its latest report covering the second quarter of 2021, Eurofer said that EU apparent steel consumption had increased to 40 million tonnes, compared with 36.3 million tonnes in the first quarter.
The second quarter total represented a significant year-on-year increase of 40.5%, compared with growth of just 0.8% year on year in the first quarter, although Eurofer said this was mainly due to the extremely low levels of consumption in 2020 caused by the economic impact of the Covid-19 pandemic.
Growth in Europe’s steel-using industries is expected to continue through to the end of 2021, albeit at a more moderate pace, Eurofer said on Thursday October 28.
By the first quarter of 2022, most of the current global supply chain disruptions should have disappeared or eased significantly, the association said. These headwinds include the shortfall in some critical raw materials; the semiconductor shortage affecting the automotive industry; surging energy and shipping costs; the sluggish implementation of vaccination plans in some EU member states; and the ongoing negative impact of Covid-19 variants, according to the latest Eurofer outlook.
Steel consumption is set to rebound by 13% overall in 2021 and to grow more moderately, by about 4.7%, through 2022, when it is expected to return to above 2017 levels due to mild, but continuing, improvements in demand from the steel-using sectors, Eurofer said.
“The outlook is becoming increasingly uncertain due, in particular, to disruptions in the global supply chain, which are likely to [have a] serious impact on demand from the steel-using sectors,” the association said.
Construction The construction sector rebounded considerably in the second quarter of 2021, increasing by 18.6% year on year on improved construction activity and the general economic restart across the EU.
The significant scale of the rebound, however, was linked to the very low figures a year earlier due to the pandemic.
“Growth in the second quarter of 2021 was fueled by residential investment (up 17.9%), boosted by mortgage rates staying at record lows and the housing support schemes in many [EU] member states. Positive developments were also seen in ‘other construction’ investments (up 15.2%), in particular in civil engineering, [which has been] used by governments as a cyclical tool to support the economic recovery,” Eurofer said.
The construction sector is forecast to continue rebounding and is expected to grow by 6.4% overall in 2021 and by 4.2% in 2022, according to Eurofer.
Fastmarkets’ weekly price assessment for steel reinforcing bar (rebar), domestic, delivered Northern Europe averaged €749.23 ($871.78) per tonne in the second quarter of 2021 compared with €473.08 per tonne in the same quarter in 2020.
The steel rebar market across Northern Europe has been picking up over the past week or so, however, with market sources expecting prices to rise in November because of restocking activity, sources told Fastmarkets on Wednesday October 27.
Automotive In the second quarter of 2021, automotive sector output increased by 70.5% year on year, predominantly due to rising from the record lows seen in 2020 when industrial production was idled because of the pandemic. The auto industry was the hardest hit of all the steel-using sectors, Eurofer said.
Ongoing disruptions to semiconductor supplies, hikes in energy prices and rising shipping costs globally, have been curbing automotive industry output growth in Europe, particularly, and are the main reasons or the continuing depressed demand and consumer uncertainty.
Automotive output is expected to rebound by 9% overall in 2021, however, and by 12.1% in 2022, according to Eurofer.
European prices for hot-rolled coil were broadly stable on October 28, and while buyers and mills continued to hold back, sentiment was upbeat, sources told Fastmarkets.
Fastmarkets’ calculation of the daily steel hot-rolled coil index, domestic, exw Northern Europe averaged €1,061.09 per tonne in the second quarter of 2021, compared with €420,46 in the April-June quarter of 2020.