Diverging Steel Sector Performance In Europe And The Americas

Business Monitor International (BMI) has just published its latest analysis of the global steel industry, and subscribers can read two key articles in our online service.

Europe: We continue to see a massive divergence between the outlooks for Western and Eastern Europe’s steel sector over the coming years. Germany, France and Italy will see subdued growth in steel demand due to negligible or weak GDP growth rates and a lack of construction activity, while production will remain muted on the back of low steel prices. The situation is almost diametrically opposite in Russia and Turkey, as the two countries embark on significant infrastructure and construction projects. Regarding production, both countries have major projects on the horizon, and despite the availability of cheap imports of Chinese steel, domestic producers are best placed to benefit.

Americas: In the Western hemisphere, major Latin American steel producers in Brazil and Mexico should see strong steel demand growth as infrastructure and construction growth rates exceed those of North America. Both countries will also see strong automotive production growth rates, particularly Mexico. The US and Canada will meanwhile see tepid demand, although we still expect positive real growth this year and the next. Performances among US steelmakers have diverged in recent years, with some firms hurt more by higher input costs and cheap Chinese imports than others. We expect this gap to continue during our five-year forecast period.

Next week, we will be publishing our outlook for the Asian steel industry.