|
|
 |
|
Viewing report
|
|
|
|
Germany Metals Report Q4 2010
Business Monitor International, Oct 2010, Pages: 54
The Germany Metals Report provides industry professionals and strategists, corporate analysts, metals associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Germany's metals industry.
In the first seven months of 2010, German crude steel output grew 58.7% y-o-y to 26.22mn tonnes, with hot-rolled output up 47.3% to 22.09mn tonnes. The recovery in German steel and aluminium industries was nevertheless stronger than that envisaged by BMI in the previous quarter. Nearly all plants were back in operation during this time. BMI believes the industry as a whole is operating at a comfortable profit margin, with producers better able to pass on rising raw material costs to their customers. However, a higher base, and the impact of fiscal austerity measures in Germany and across the EU will lead to lower rates of growth in H210.
Going into H210, the country was in the middle of a slowdown, with a fall in industrial orders and a more pessimistic outlook for key metals consuming industries, namely construction, the automotive sector and machine tools. The automotive industry is showing particular signs of depression following the withdrawal of car scrapping incentive schemes. Despite a recovery in the construction industry, long steel production is still lagging behind, with July output up just 3.9% y-o-y to 865,000 tonnes. Indeed, BMI anticipates stagnation or contraction of the segment over H210 due to higher base effects and a slowdown in demand. Even the machine tool industry, which has witnessed a surge in both domestic and export orders, with growth at 71% y-o-y, the Verein Deutscher Werkzeungmaschinenfabriken (VDW, German Machine Tool Builders’ Association) forecasts a 12% decline in sales for the full year due to thin order backlogs, the base effect, poor growth in orders for customised machinery manufacturers, as well as setbacks in the US market and the slowdown in Chinese growth.
Although we have raised our crude steel output growth forecast from 23.5% to 25.4% in view of the strong growth in Q210, we believe that growth will diminish to zero or contract by Q410, with buyers keeping inventories low due to risk aversion. The 2010 GDP growth forecast of 2.0% will almost entirely be driven by external consumption, inventory re-stocking and statistical base effects. We expect German growth to dip back to 1.5% in 2011, before recovering to a trend average of 1.6%. The metals processing sector will follow the broad economic trend. By 2013, steel output should have returned to pre-recession levels.
The market situation will be affected by rising raw material costs – bauxite for aluminium and iron ore and scrap for steel – alongside increasing risks in the difficult and uncertain financial markets, as well as uncompetitive electricity costs. While growth rates have surged back into positive territory, the absolute level of output remains well below peak level. This in large part reflects the weakness of the demand recovery in the US and key trading partners in Western Europe. Growth in German metals industries will be weighed down by low overall industry capacity utilisation, poor demographic trends, fiscal austerity and weak wage growth. As a result, we expect long-term German growth to lag behind that of other world economies including the UK, the US and major emerging markets. This will restrain the rate of output growth in the country both in the short and long term.
In the aluminium sector, BMI sees primary output growing 23.4% in 2010 to over 502,700 tonnes, with long-term prospects set to be bolstered by the growing number of applications for aluminium as a lightweight substitute for steel. On the downside, high electricity and environmental costs are undermining the long-term viability of German smelters, with Norsk Hydro reportedly considering closure of the country’s largest primary aluminium producer. Consequently, primary aluminium output will reach 580,700 tonnes in 2014, 4% below 2008 levels, while exports should reach 1.83mn tonnes. However, apparent aluminium consumption will surge to 3.4mn tonnes from an estimated 2.4mn tonnes in 2009, with most of the increase supplied by imports which will rise to 3.7mn tonnes in addition to domestic recycling.
Product samples
A sample for this product is available. Please Login/Register to download this sample.
Customers who bought this item also bought
Germany Metals Report Q1 2011
Germany Metals Report Q2 2011
Germany Metals Report Q3 2010
Germany Metals Report Q1 2010
Germany Metals Report Q2 2012
Germany Metals Report Q4 2011
Germany Metals Report Q1 2012
Germany Metals Report Q4 2009
Germany Metals Report Q3 2009
Netherlands Metals Report Q2 2012
|
|
|
|
