(Bloomberg) --
A downturn in European steel demand that's already cost the region's producers a combined $50 billion in market value looks set to continue into early 2020 before signs of stabilization appear.
Apparent steel demand in the European Union will sink 3.1% this year, the most since 2012, according to forecasts and historic data from industry lobby group Eurofer. Conditions are seen improving slightly from the second quarter and apparent consumption is expected to rise 1.4% in 2020, mostly due to modest restocking.
Steel markets in Europe and elsewhere have been battered this year by trade disputes, economic growth worries and uncertainty over Brexit. Europe's manufacturing sector is unlikely to bottom out soon, Eurofer said.
Globally, steel demand outside of China is expected to almost stall in 2019 on shrinking consumption in Europe and a slowdown in the U.S., the World Steel Association projected earlier this month.
| EU apparent steel consumption (Eurofer data and forecasts) | ||||||||
|---|---|---|---|---|---|---|---|---|
| Period | Q1'19 | Q2'19 | Q3'19 | Q4'19 | Q1'20 | Q2'20 | Q3'20 | Q4'20 |
| Year-on-year change | -1.6% | -7.7% | -2.3% | -0.7% | -1.2% | 5% | 0% | 1.8% |
EU producers have been particularly hard hit as low-cost steel from countries like Turkey, Russia and China have flooded the market, pushing prices to multiyear lows.
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U.S. threats to impose tariffs on EU cars and components still hang over the industry, Eurofer said.
“A no-deal Brexit and a further escalation in protectionist trade measures would make the outlook even more negative,” it said.
To contact the reporter on this story: Elena Mazneva in London at emazneva@bloomberg.net
To contact the editors responsible for this story: Lynn Thomasson at lthomasson@bloomberg.net, Liezel Hill, Nicholas Larkin
©2019 Bloomberg L.P.
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