Belgium Metals Report Q4 2011
Business Monitor International, September 2011, Pages: 48
In 2010, Belgian domestic finished steel consumption grew 19% to 4.45mn tonnes while apparent aluminium consumption was up 30% to 181,600 tonnes, with aluminium product imports rising 21% to just under 550,300 tonnes and exports growing 20% to 465,100 tonnes. In the first seven months of 2011, Belgian crude steel output rose 9.3% year-on-year (y-o-y) to 5.18mn tonnes, which follows 52.6% growth to 8.09mn tonnes in 2010. In the early months of 2011, production improved markedly on the back of the broader regional economic recovery. Capacity utilisation rates were returning towards pre-crisis levels, matched by a rebound in export receipts and rising business confidence.
Insufficient demand prompted ArcelorMittal to temporarily close its 1.65mn tonnes per annum (tpa) blast furnace B at its plant in Liege as well as idling its 1.25mn tpa No.2 blast furnace at Florange, France. The units would probably remain offline in Q311 and Q411 due to insufficient demand, restarting only with a marked improvement in orders. Export growth is likely to tail off due in part to base effects but also as the eurozone loses momentum and German growth moderates.
We continue to highlight that growth in steel and aluminium production will not return to pre-crisis levels, which will be reflected in the performance of the steel and aluminium sectors. BMI believes it will be 2015 before crude steel output returns to anywhere near pre-recession levels, if capacity is not permanently cut in the mean time. With total production capacity of 10mn tpa of continuous casting slab and 8.5mn tpa of hot rolling mill capacity, ArcelorMittal’s output will determine Belgian steel production in 2010. The future of the three plants that were under the control of the Russian-Belgian joint venture (JV) Steel Invest and Finance will also face major difficulties, although they are less dependent on the automotive industry and are expected to see output recover more quickly than at the ArcelorMittal plants.
They have either been mothballed or are operating at 50-70% capacity since the recession struck in 2008. The situation looks more promising now that two of the plants have been bought out by the Russian partner NLMK, while a shareholder in the Belgian partner Duferco has taken control of the other.
It will be 2013 before domestic finished steel consumption exceeds 5mn tonnes again. A similar trend will be observed in the Belgian aluminium market.
Consumption will be constrained by higher rates of unemployment, thereby dragging down spending on consumer durables and cars. Again, a sharp slowdown in 2011 will mean it will take a four- or five-year period for domestic consumption to return to pre-recession levels, with 2015 consumption reaching around 421,000 tonnes, a level more typical of the years prior to the collapse in demand. This will have a knock-on effect on imports of primary aluminium, which will see a low growth scenario in 2011.
Executive Summary
SWOT Analysis
Belgium Metal Industry SWOT
Belgium Political SWOT
Belgium Economic SWOT
Global Market Overview
Steel Forecast
Steel to Average US$580/tonne In 2011
BMI Steel Forecast
Steel Prices
Cost Push On The Supply Side
Few Supply Constraints In Sight, For Now
Commodities Forecast
Monthly Metals Update
Gold
Copper
Aluminium
Lead
Nickel
Tin
Zinc
Regional Overview
Forecast Scenario
Table: Belgium Metals Industry Production And Trade (‘000 tonnes unless stated), 2008-2015
Macroeconomic Outlook
Table: Belgium – Economic Activity
Competitive Landscape
Company Profiles
ArcelorMittal
Steel Invest and Finance (Duferco)
Corus
Alcoa
Global Assumptions, Q4 2011
Table: Global Assumptions, 2009-2015
Table: Global And Regional Real GDP Growth, 2010-2013 (% change y-o-y)
Table: Developed Market Exchange Rates, 2010-2013 (average)
Table: Emerging Market Exchange Rates, 2010-2013 (average)
Developed States
Table: Developed States’ Real GDP Growth, 2010-2013 (% change y-o-y)
Emerging Markets
Table: Emerging Markets’ Real GDP Growth Forecasts, 2010-2013 (% change y-o-y)
Country Snapshot: Belgium Demographic Data
Section 1: Population
Table: Demographic Indicators, 2005-2030
Table: Rural/Urban Breakdown, 2005-2030
Section 2: Education and Healthcare
Table: Education, 2002-2005
Table: Vital Statistics, 2005-2030
Section 3: Labour Market and Spending Power
Table: Employment Indicators, 2001-2006
Table: Consumer Expenditure, 2000-2012 (US$)
Table: Average Annual Wages, 2000-2012
BMI Methodology
How We Generate Our Industry Forecasts
Cross Checks
- ArcelorMittal
- Steel Invest and Finance (Duferco)
- Corus
- Alcoa
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