Uncertainty looms in the European steel outlook, according to EU steel association EUROFER. A present “downslide” in the EU manufacturing sector is unlikely to bottom out soon, association director Axel Eggert said in a recent statement, noting “escalating trade disputes” between the United States and several of its main trading partners as well as continuing uncertainty about Brexit, both major factors that could continue to have a dampening impact on the EU steel industry. EU steel consumption declined by 7.7% YoY in the second quarter of the year after falling by 1.6% in the first quarter. A combination of weakened exports and lower investment has taken a toll on steel use in the European Union, putting consumption at 39.3 Mt in Q2. The stock cycle, says EUROFER, turned negative in the quarter, contrary to the seasonal pattern, worsening an already negative trend in final steel use. The downturn in steel demand drove a 4% YoY fall in domestic deliveries in the EU in Q2 after a decline of 3% in Q1. A low-level stabilization in 2020, however, is seen, says Eggert, with an expected growth rate in consumption of 1.4% due to modest re-stocking.
Forecasts for the EU sugar market are showing some tightening in supply in the current season with estimates by the European Commission that planted beet area has declined by 5.5%. Yields are projected to grow from 10.9 t/ha to 11.4 t/ha YoY, even as this is still considerably lower than the yield of 12.7 t/ha seen in the 2017/18 season. This will likely mean that EU sugar output in the 2019/20 season will amount to 17.5 Mt, down from 17.6 Mt last season. Analysts say that there are nonetheless further downside risks on this forecast with the Commission itself revising EU beet yields down by even more to 71.3 t/ha this month, widening the difference to the five-year average of 75.1 t/ha. This is likely to leave ending stocks for 2019/20 fairly tight at 1.0 Mt, which observers say could continue to support EU sugar prices. EU sugar exports, meanwhile, are set to decline to around 1.4 Mt within the present season, down from 1.6 Mt in 2018/19 and far lower than the 3.35 Mt exported in 2017/18.
Imports of scrap metal to Turkey, the world’s top importer of scrap, declined by 11% year-on-year in the year through September, say new customs statistics. They amounted to 10.8 Mt for the nine-month period. Analysts said part of the reason for the decline was due to Turkish steel factories having decreased capacity utilization as well as a number of non-scheduled production suspensions within the period. Imports from the US in the period amounted to 2.7 Mt followed by the Netherlands with 1.8 Mt, the UK with 1.6 Mt and Russia with 1.5 Mt. Turkish scrap imports from Belgium fell sharply to 0.89 Mt in the period, down from 1.6 Mt a year before. Imports from Germany were 0.79 Mt in the period.
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