Austria Metals Report Q1 2011
Business Monitor International, January 2011, Pages: 41
The 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 performed better than expected in 2010, but 2011 will see a sharp moderation in growth due to the effects of fiscal austerity programmes on the European car industry as well as a higher base of comparison, according to this latest Austria Metals Report from BMI.
In 2010, Austrian crude steel output was up 28.6% year-on-year (y-o-y) to 7.28mn tonnes, although in common with other EU states output declined after May, before staging a recovery in October and shooting past BMI’s forecast of 6.82mn tonnes. Industrial production expanded by a robust 8.2% y-o-y in August from 5.9% the previous month, but plunged 11.6% against August 2008. The recovery in output has been accompanied by an improvement in industrial capacity utilisation rates. According to Eurostat’s forward-looking indicator for the fourth quarter of 2010, the capacity utilisation rate ticked up to 82.1% from 81.7% the previous quarter, marking a significant improvement from the low of 73.2% recorded in Q209.
It should be noted, however, that utilisation rates remain well below trend levels (which are around 82%) and as such, though a recovery is under way, the gap is likely to take significant time to close given the weaker domestic and external demand conditions. Moreover, growth levels will plateau due to the effects of austerity programmes across Europe and a car market that remains in the doldrums. 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 making the market bleak.
Compared with pre-recession activity, domestic demand remains weak and fiscal consolidation in 2011 will further weigh on domestic demand recovery. Austria’s leading steelmaker Voestalpine had voiced concerns that Chinese production could undermine its margins and reduce output, but despite an influx of Chinese steel on European markets it managed to sustain growth. 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. Key to the company’s performance is demand from its niche markets, namely the automotive, railway systems and pipeline sectors.
Although the Austrian economy is expected to grow 2.0% in 2011 following 1.8% growth in 2010, 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, the crude steel forecast for 2011 has been revised upwards from 7.07mn tonnes to 7.54mn tonnes, an increase of 3.6% y-o-y. In terms of the domestic market, 6.5% growth is forecast in finished steel consumption to 3.75mn tonnes in 2011 following 12.1% growth in 2010, but it will take until 2012 before the market returns to pre-crisis levels. Consumption should reach 4.27mn tonnes in 2015, an increase of around 7% on pre-crisis levels. In the aluminium market, trends will mirror steel consumption although the trend will be stronger, with y-o-y growth in aluminium consumption of 8.2% to 384,200 tonnes in 2011, following growth of 11.9% to 355,100 tonnes in 2010 and a contraction of 17.1% in 2009. By 2015, consumption rates should be exceeding 500,000 tonnes.
SWOT Analysis
Austria Political SWOT
Austria Economic SWOT
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, 2007-2015 (‘000 tonnes unless stated)
Macroeconomic Forecasts
Austria – Economic Activity, 2008-2015
Competitive Landscape
Company Profiles
VoestAlpine
Austria Metall AG
Global Assumptions Q1 2011
Table: Global Assumptions
Table: Global & Regional Real Gdp Growth % Chg Y-O-Y
Table: Developed States, Real Gdp Growth Forecast
Table: Emerging Markets Aggregate Growth
Table: Consensus Forecasts
BMI Methodology
How We Generate Our Industry Forecasts
Cross Checks
- VoestAlpine
- Austria Metall AG
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