By Alex MacDonald
LONDON--European Union steel demand is expected to remain depressed for longer than expected with a recovery now only likely from the second quarter of 2013 onwards, the European steel association, or Eurofer, said Monday.
"Weak confidence in combination with liquidity and credit issues is showing a negative impact on the EU business climate," said Eurofer's Director General Gordon Moffat. "With global economic growth currently hitting a soft patch, export growth is also cooling down, despite the weaker euro. This is bad news for the manufacturing sector and for steel consumption in the EU," he added.
EU apparent steel consumption is estimated to have fallen 9% on year in the first half of 2012 and is forecast to hover around the depressed levels of the second half of 2011 during the remainder of this year, Eurofer said.
The association, which represents steelmakers such as ArcelorMittal (MT) and ThyssenKrupp (TKA.XE), said that EU apparent steel consumption in 2012 is therefore forecast to drop 5% on the year.
"Our base case scenario is still a moderate improvement of the business cycle in 2013 and a corresponding pick-up in real and apparent consumption. However, confidence and access to finance need to improve to get the market moving upward again," Moffat said.
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