Austria Metals Report Q4 2010
Business Monitor International, October 2010, Pages: 41
Business Monitor International's Austria Metals Report provides industry professionals and strategists, corporate analysts, metals associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Austria's metals industry.
The Austrian steel industry’s exposure to the automotive industry make it highly vulnerable to the downturn in the car market in H210, leading to a drastic slowdown in steel production growth, according to BMI’s latest Austria Metals Report.
In the first seven months of 2010, Austrian crude steel output was up 39.9% year-on-year (y-o-y) to 4.13mn tonnes, although in common with other EU states output declined after May. The Austrian steel industry is at the mercy of the volatile European markets, despite the expected upturn of production and exports. Compared to pre-recession activity, domestic demand remains weak and fiscal consolidation in 2011 will further weigh on domestic demand recovery. Austria’s leading steelmaker Voestalpine warned that the strong performance it reported in the first few months of 2010 would be short-lived in the event of unsustainable Chinese production growth and the debt crisis led to a slowdown in the EU economy from H210. Rising raw material prices were also prompting concern with the steelmaker assessing in mid-2010 how much it could push increased costs onto its customers, but some increase in prices was inevitable. Key to the company’s performance is demand from its niche markets, namely the automotive, railway systems and pipeline sectors.
Between 60% and 80% of Austrian aluminium and steel production is exported, with the hard-hit automotive industry comprising around 25% of sales. With the end of scrappage schemes in most countries in Europe, sales have fallen back to lower levels, ending the short-term increase created by the incentive packages and giving a bleak outlook for the market. As such, it will be 2014 before Austria returns to the 7.6mn tonne crude steel production and 6.9mn tonne hot rolled production levels seen before the recession. Our forecast is supported by VoestAlpine’s recent statement that a return to production levels of 2007 ‘is likely only over a period of several years’. As such, the Austrian steel industry is likely to feel the worst affects of the anticipated downturn.
Although the Austrian economy is expected to grow 1.1% in 2010 following a 3.4% contraction in 2009, this will not be anywhere near enough to reverse the losses seen in 2009 when crude steel output plummeted 25.4% to 5.66mn tonnes. However, we have revised upwards our crude steel forecast for 2010 from 6.19mn tonnes to 6.82mn tonnes, an increase of 20.5% y-o-y. Most of the growth concentrated in the first half of the year, with growth in H210 down to just 2.4% y-o-y.c
Executive Summary
SWOT Analysis
- Austria Political SWOT
- Austria Economic SWOT
Global Market Overview
- Table: World’s Top 10 Steel Producing Countries
- Table: Recent And New Smelter Capacity
Commodities Forecast
- Nickel
- Table: BMI’s Nickel Forecasts
- Table: Nickel, 2005-2011
- Aluminium
- Table: BMI’s Aluminium Forecasts
- Table: Aluminium, 2005-2011
- Copper
- Table: BMI’s Copper Forecasts
- Table: Copper, 2005-2011
- Regional Overview
Forecast Scenario
- Table: Austria Metals Industry, 2007-2014 (‘000 tonnes unless stated)
- Macroeconomic Forecasts
- Table: Austria – Economic Activity, 2007-2014
Competitive Landscape
Company Profiles
- VoestAlpine
- Austria Metall AG
Global Assumptions – Q4 2010 Update
- Table: Global Assumptions
- Table: Global & Regional Real Gdp Growth
- Table: Consensus Forecasts
- Table: Developed States, Real Gdp Growth Forecast
- Table: Emerging Markets Aggregate Growth
BMI Methodology
- How We Generate Our Industry Forecasts
- Cross Checks
- VoestAlpine ,
- Austria Metall AG
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