The outlook for the European steel market next year is for a cautious recovery from a low level, according to Jeroen Vermeij, director of market analysis and economic studies at European steel producers' association Eurofer.
Speaking at the Eurometal Steel Net forum in Copenhagen Wednesday, Vermeij said apparent European steel consumption would rise by around 3% in 2014 after dropping 2-2.5% this year.
Steel intensity will be less negative next year, though it will still drag on real consumption, Vermeij said.
The steel market would be buoyed by a general strengthening in macroeconomic activity, with GDP to grow by around 1.3% next year, he said.
EU steel-using sectors would grow by a combined 2%, after a total fall of 3% in 2013, with inventory recovering and low stocks throughout supply chains.
There would be a recovery in internal demand driven by investment in machinery and equipment, aided by loosening credit supply.
In the construction sector, residential and repair and maintenance were currently displaying the strongest prospects, but overall there would be no real rise in major steel using construction sectors, with a lack of large projects, financial sector deleveraging and unsold property stocks continuing to be an issue.
The automotive sector would grow around 2% next year, after output and sales all contract in 2013 -- EU sales have been in a downturn for five years, Vermeij said.
Mechanical engineering had a "quite robust" outlook for 2014, after a 3.5-4% fall this year.
The better investment climate, easing finance and pent-up demand would mean output rising 3.5% and exports gaining upward momentum, he said.
Steel demand over the second half of 2013 had trended higher after a weak six months, with import pressure easing and end-use activity showing a "relative improvement," albeit from a low level, after stabilizing in July-August -- more so for flats than longs, Vermeij said.
This economic strengthening would be supported by an upturn in the largest developed economies, with the US debt deal averting disaster and manufacturing growing in the country, and strong industrial activity in Japan as well as indicators remaining upbeat.
The BRIC economies would experience a "mild improvement"in 2014, after disappointing this year, Vermeij said.
