European steelmakers warn of tough times ahead

Eurofer sees EU 2009 steel consumption down 0.8 pct.
Steel consumption is likely to shrink next year from the 2008 level, with the biggest decline in demand in the first half of the year, the European Confederation of Iron and Steel Industries said on Monday. Eurofer forecast that output in sectors using steel would drop 0.8 percent in 2009 after a 0.6 percent increase forecast for this year as the whole economy slows to a growth rate of 0.2 percent from 1.3 percent seen this year. "In line with the darkened macro-economic outlook, the latest forecasts for production growth in the steel-using sectors ... signal a significant deterioration in activity over the coming quarters," Eurofer said. "In the first half of next year ... weakening demand will result in new orders drying up rapidly and output declining in most sectors. The most badly affected sectors are construction and particularly the automotive sector," it said. Eurofer, which lists as its members steelmakers such as world leader ArcelorMittal and Germany's largest, ThyssenKrupp , forecast that output in steel-consuming sectors would fall 1.1 percent year-on-year in the last quarter of this year. It is to fall 1.6 percent in the first quarter of 2009 and shrink 2.2 percent in the second quarter, it said.