Steel Outlook for 2021-2022 in EU: Consumption

The supply-side of the EU steel market analyses factors affecting domestic and foreign supply, as well as stock effects in the distribution chain and at the end-user level.

Apparent steel consumption

Definition: Apparent consumption is also referred to as ‘steel demand’. It is total deliveries of all steel products and qualities by EU producers plus imports less ‘receipts’ into the EU, minus exports to third countries. In other words, apparent consumption is deliveries by EU producers plus imports minus receipts (that is, imports by EU producers themselves of material that is further processed), minus exports to third countries. EUROFER’s definition of apparent consumption includes all qualities, including stainless, and all finished products and semi-finished products. If apparent consumption exceeds real steel consumption, the surplus is stocked in the distribution chain. If apparent consumption is less than real steel consumption, inventories are being withdrawn.

Apparent steel consumption in the third quarter of 2020

Further to the exceptional drop in the second quarter (i.e. -25%) due to harsh lockdown measures all over the EU leading to a stop in most industrial activities, EU apparent steel consumption fell (-11.6%) year-on[1]year in the third quarter of 2020, reaching 32.8 million tonnes. This marked the seventh consecutive fall. The outbreak of the Covid-19 pandemic led to an almost complete stop in industrial activity from mid-March 2020 took its heaviest toll at that point, but steel demand had already been impacted in the previous quarters. EU domestic and foreign supply

A substantial deterioration in business conditions due to the onset of the pandemic was added to existing downside factors that had already seriously depressed steel demand over the preceding quarters: uncertainty about near-term business conditions, weak demand from the manufacturing sector and continued stock reduction to record lows have resulted in exceptional quarterly falls in the second quarter.

As a result of these downside factors prior to the pandemic, apparent consumption in the EU fell (-5.3%) over the entire year 2019, compared to 2018, when apparent consumption increased year-on-year (+2.6%). EU domestic and foreign supply In line with what had been seen in preceding quarters, imports of steel products from third countries into the EU market – including semi-finished products – decreased markedly over the third quarter of 2020 as a result of extremely weak steel demand in the EU, coupled with current safeguard measures, resulting in a year-on-year drop (-25.4%), even steeper than that recorded in the second quarter (-16.6%).