2012-05-17 07:32:21 - Fast Market Research recommends "United Kingdom Metals Report Q2 2012" from Business Monitor International, now available

High energy costs and an increasingly hostile operating environment prompted the permanent closure of the Lynemouth primary aluminium smelter in March leaving the country with just one small smelter, while steelmaking is set to fall for a fifth consecutive year, according to BMI's latest UK Metals Report.

In 2011 UK crude steel output fell 2.3% y-o-y to 9.5mn tonnes (mnt) with the eurozone crisis and domestic uncertainty hitting production in H2. This came on top of a 3.5% decline to 9.71mnt in 2010. With manufacturing in a weak position, this was not enough to improve output and the decline in steelmaking continued into 2012. Monthly output fell 26% y-o-y to 562,000 tonnes in February, a record low and lower than the

level seen in the aftermath of the 2008 financial crisis and subsequent recession. The abrupt decline coincided with a downturn in the construction sector, with output falling 10.6% in the three months to end-January 2012 compared to the previous three months.


Full Report Details at
- www.fastmr.com/prod/384872_united_kingdom_metals_report_q2_2012. ..


Production did not accurately reflect the demand situation and on the domestic market there is likely to be some restocking activity over coming months. As such, BMI expects a recovery from the lows seen in Q112, although it will not be enough to stage a recovery. Crude steel output is set to decline 4.5% y-o-y to 9.05mnt in 2012 while hot-rolled output is forecast to fall 3.5% to 7.94mnt in the same year.

The UK's steel output has been in long-term decline as rising costs and a lack of competitiveness with emerging players such as China and India has forced companies to look elsewhere for more profitable areas of production. BMI does not forecast a full return to pre-recession rates of output over the mediumterm and there are question marks over its future direction. Energy costs and the economic downturn are simply exacerbating the structural change in the global production base with output shifted to Asia, particularly China.

Steel output remains down a third from pre-recession norms and BMI does not anticipate resurgence amid the gloomy economic climate. The beginning of a sustained recovery in the sector is expected to be delayed until late 2012 at the earliest, when we expect domestic finished steel consumption to rise 5% to 9.8mnt and exports to rise 8.7% to just under 6.8mnt. However, it will take until 2015 at the earliest for domestic and external demand to return to normal.

Primary aluminium production has already been scaled down following the cut in national production capacity due to a lack of long-term availability of cheap electricity. The UK has one aluminium smelter, RioTinto Alcan's 43,000 tonnes per annum (tpa) plant in Lochaber, following the closure of the Anglesey and Lynemouth smelters in 2009 and 2012 respectively. The Lochaber smelter is likely to operate at close to capacity from 2012, but will be insufficient to cover domestic demand.

Report Table of Contents:

SWOT Analysis
- United Kingdom Political SWOT
- United Kingdom Economic SWOT
- United Kingdom Business Environment SWOT
Global Market Overview
- Steel Forecast
- Table: BMI's Steel Forecasts
- Table: Steel Products And Inputs - Price Data
Commodities Forecast
- Gold
- Copper
- Aluminium
- Lead
- Nickel
- Tin
- Zinc
Europe Metals Overview
Industry Forecast
- Table: United Kingdom's Steel Industry, 2009-2016 ('000 tonnes, unless otherwise stated)
- Macroeconomic Outlook
- Table: United Kingdom - Economic Activity, 2011-2016
Competitive Landscape
- Aluminium
- Steel
Company Profiles
- Tata Steel Europe
- Rio Tinto
- Table: Rio Tinto's Key Financial Data, 2008-2011
Global Assumptions, Q212
- Table: Global Assumptions, 2010-2016
- Table: Global And Regional Real GDP Growth, 2010-2013 (% change y-o-y)
- Table: Developed Market Exchange Rates, 2011-2013
- Table: Emerging Market Exchange Rates, 2010-2013
- Developed States
- Table: Developed States - Real GDP Growth, 2010-2013
- Emerging Markets
- Table: Emerging Markets - Real GDP Growth. 2010-2013
- Consensus
- Table: BMI And Bloomberg Consensus Real GDP Growth Forecasts, 2011 And 2012 (%)
Country Snapshot: UK Demographic Data
- Section 1: Population
- Table: Demographic Indicators, 2005-2030
- Table: Rural/Urban Breakdown, 2005-2030
- Section 2: Education And Healthcare
- Table: Education, 2002-2005
- Table: Vital Statistics, 2005-2030
- Section 3: Labour Market And Spending Power
- Table: Employment Indicators, 2000-2005
- Table: Consumer Expenditure, 2000-2011 (US$)
- Table: Average Annual Wages, 2000-2012
BMI Methodology
- How We Generate Our Industry Forecasts
- Cross Checks

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