2012-09-03 14:12:30 - New Materials research report from Business Monitor International is now available from Fast Market Research
BMI's UK Metals Report for Q3 2012 examines how British steelmakers are responding to the long-term challenges posed by a structural change in the global steel market with a great focus on quality and niche production over large volume continuous casting. The report also assesses prospects for growth in an increasingly volatile external market as well as domestic stagnation, but warns the chief challenge to competitiveness will remain the UK's high electricity prices, which are putting margins under pressure.
In the first four months of 2012, British crude steel output plummeted 15.8% y-o-y to 2.76mn tonnes (mnt), one of the worst performances in the EU. This follows declines of 2.4% and 3.6% in 2011 and 2010 respectively, underlining the ongoing weakness
of the steel industry as it struggles with a stagnant domestic economy and poor export performance.
Full Report Details at
- www.fastmr.com/prod/451268_united_kingdom_metals_report_q3_2012. ..
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 2013 at the earliest, when we expect domestic finished steel consumption to rise 2.5% to 10.1mnt. This is a downward revision from the previously forecast 13.1mnt, reflecting the impact of recession and a likely protracted stagnation in the British economy.
Threats continue to face UK steelmaking due to lack of competitiveness. TATA Steel has warned that the UK's high electricity costs meant that production costs were high relative to mainland Europe - 50% higher than in France, 30% above the Netherlands and 25% above Germany. This meant that production costs were GBP5.00/tonne higher than the mainland. The steelmaker warned that government policy, in particular the carbon floor price, was undermining the competitiveness of production and making it an increasingly unattractive place for manufacturing.
Over the last quarter BMI has revised the following forecasts/views:
* Rio Tinto Alcan's 43,000tpa Lochaber smelter, the UK's sole primary aluminium producer, is likely to operate at close to capacity from 2012, but will be insufficient to cover domestic demand.
* BMI expects a recovery from the lows seen in Q112, although it will not be enough to stage a full return to pre-2008 levels. Crude steel output is set to decline 3.0% y-o-y to 9.2mnt in 2012, an upward revision from 9.1mnt previously forecast.
Report Table of Contents:
- United Kingdom Business Environment SWOT
Europe Metals Overview
- Table: United Kingdom's Steel Industry Forecasts ('000 tonnes, unless otherwise stated)
- Table: United Kingdom's Steel Industry Historical Data ('000 tonnes, unless otherwise stated)
- Macroeconomic Outlook
- Economic Recovery: The Long Road Home
- Table: United Kingdom - Economic Activity
- Table: BMI Steel Forecasts
- Table: Steel Price Data, (US$/TONNE)
- Government Policy
- Rio Tinto
- Table: Rio Tinto's Key Financial Data, 2008-2011
BMI Global Assumptions, Q312
- Table: Global Assumptions, 2010-2016
- Developed States
- Table: Developed States' Real GDP Growth, 2010-2013
- Emerging Markets
- Table: Emerging Markets' Real GDP Growth, 2010-2013
- Table: Real GDP Growth Consensus Forecasts, 2012 And 2013
- How We Generate Our Industry Forecasts
- Cross Checks
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