The European Union (E.U.) posted a 3% increase in apparent steel consumption during Q1 2018 compared with Q1 2017, according to a recent European Steel Association (EUROFER) report.
According to EUROFER, the E.U. steel market began 2018 on “relatively strong footing,” but that rising trade tensions could knock the sector off course.
“The latest data confirms the severe impact the US Section 232 tariffs are having by deflecting imports into the EU – with surges across almost all product lines,” said Axel Eggert, EUROFER director general, in a release. “This surge is occurring at the same time as growth predictions are being revised onto flatter trajectories. We cannot risk the ongoing recovery being put at stake– and welcome the recent EU safeguard in its efforts to stabilise the sector.”
According to the report, real steel consumption and seasonal restocking are factors explaining the 3% rise in apparent consumption during Q1.
Domestic deliveries to the E.U. market rose 2.1% during the aforementioned period. Meanwhile third-country imports rose by 9.8% to 10 million tons, hitting the highest quarterly total since Q3 2007, according to EUROFER.
“This confirms that the volume effects of anti-dumping measures imposed by the European Commission over the course of 2017 faded out rapidly due to other third country suppliers filling the gap left by the countries which had duties applied to them,” the report states.
As for steel demand, the EUROFER report projects growth to continue in 2018 and 2019, but notes the uncertainty of “international steel fundamentals.”
“The sharp rise in imports of specific steel product from some third countries confirms that steel trade distortions remain a threat, which could be exacerbated by trade deflection resulting from the Section 232 tariffs applied by the Trump administration,” the report argues.
Other highlights from the EUROFER report:
- In Q1 2018, all steel-using sectors in the E.U. posted production growth (except for steel-tube manufacturing).
- Production activity is forecast to grow 2.8% in 2018 and 1.9% in 2019.
- Economic growth in the E.U. fell to 0.4% quarter-on-quarter in Q1 2018, down from 0.7% in Q4 2017.