2013-03-21 13:37:17 - Recently published research from Business Monitor International, "Romania Metals Report Q2 2013", is now available at Fast Market Research
BMI's Romania Metals Report for Q2 2013 examines the latest developments in the country's steel and aluminium industries and whether ongoing investment will be sufficient to boost production and improve the country's competitive advantage in the years ahead. The report examines how producers are minimising investment risk and also explores the impact of the increasingly precarious external macroeconomic environment on Romanian consumption. The growth and risk management strategies being employed by the leading players in the steel and aluminium sectors are also analysed, as they seek to maximise the growth opportunities offered by the local automotive and construction sectors.
Full Report Details at
For the first half of 2012, Romanian crude steel output demonstrated a solid average growth rate
of 4.3%; however, estimated output results for the full year in 2012 currently show a decline of roughly 1.3% yearon- year (y-o-y). Although there was a recovery in 2010, this did not carry through to 2011, leading to a 1.7% drop in crude output to 3.83mnt. The first half of 2012's steel output performance looked as though it was to reverse this loss but the industry experienced a downturn in H212, although production is still more than a third less than pre-2008 levels. BMI forecasts a slight rebound in 2013 with only 1.0% growth to reach 3.82mnt of crude steel, this is owing to the continuing impact of the eurozone crisis on exports. On the upside, steel has benefitted from the depreciation of the leu against the euro, sustaining its competitive edge against Western European producers, but has been undermined by the idling of a 1mntpa blast furnace at ArcelorMittal's Galati complex 'in order to adapt production to market demand'.
With positive growth in the metals-intensive sectors of construction and autos - discussed below in further detail - within Romania, we are fairly optimistic these sectors will offer upside support to Romania's steel industry. We see these industries as helping Romania's economy as a whole begin to gain strength from 2014 onwards when we forecast real GDP growth of 3.1% y-o-y. Over the medium term, BMI forecasts Romanian steel production growth between 2013 and 2017 to show an annual average growth rate of 1.5%.
Growth has been supported by ArcelorMittal Galati's new steel mill in Hunedoara with a EUR43mn rolling mill, which came into operation in Q312. Additionally, the company increased liquid steel production to 700,000tpa to raise output of round semis at its Tubular Products Roman plant. The steelmaker is investing over EUR25.0mn in upgrading and improving production quality at its plate mill No. 2. Following the mill's modernisation, the company will be able to produce new types of plate, which will allow it to enter new markets. These downstream projects will boost the value of Romanian steelmaking.
* BMI forecasts 2013 Romanian steel production to come in at 3.82mnt, marking a mere 1.0% y-o-y growth rate. From then, we expect to see a slight uptick in growth before another moderation in output growth over our medium-term forecast period of 2013-2017.
* We see output being limited in 2013 by Mechel's decision to temporarily suspend production at the group's Romanian steelmaking facilities due to unfavourable conditions on markets of raw materials - notably ferrous scrap - and finished steel products.
* With power supplies back to normal in December 2012, aluminium smelter Alro should be able to boost output in 2013 following a 4.4% decline in output in 2012. However, production is still in jeopardy due to the financial problems of troubled electricity generator Hidroelectrica.
Report Table of Contents:
BMI Industry View
- Table: Romania - Steel Production & Consumption ('000 tonnes, unless stated otherwise)
- Table: Romania's Steel Production & Trade ('000 tonnes, unless stated otherwise)
- Table: Romania's Primary Aluminium ('000 tonnes, unless stated otherwise)
- Iron Ore: Holding Up, For Now
- Steel: Bleak Outlook
- Aluminium: Major Gains Over
- Copper: Global Stockpiles Pose Downside Risk
- Lead: Heading Lower
- Nickel: No Return To 2012 Highs
- Tin: Continued Outperformance
- Zinc: Bounce Is Coming To An End
- Table: BMI Commodity Price Strategy
- Table: Select Commodities: Performance & BMI Forecasts
- Steel Price Forecast
- Table: BMI Steel Forecast
- Table: Steel Forecast
- Tenaris Silcotub
- Alro SA
- How We Generate Our Industry Forecasts
- Cross Checks
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