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Austria Metals Report Q1 2012
Business Monitor International, Jan 2012, Pages: 40
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.
- Benchmark BMI's Independent 5-year Metals Industry Forecasts for Austria to test other views - a key input for successful budgeting and strategic business planning in the Austria Metals market.
- Target Business Opportunities & Risks in Austria through our reviews - and major deals, projects and investments.
- Exploit Latest Competitive Intelligence & Company SWOTS on your competitors and peers through company rankings by sales, market share and ownership structure – includes multi-national and national companies.
The Austrian steel industry will contract in 2012 due to the deterioration in external markets, but will not experience a collapse similar to that following the financial crisis in 2008, according to BMI’s latest Austria Metals Report.
Austrian crude steel output grew 8.4% to 6.47mn tonnes in the first 10 months of 2011 following a strong rebound in 2010. The performance seen over the year is in line with BMI’s forecast crude output of 7.58mn tonnes for 2011. Austrian steelmaker Voestalpine has thrived on strong demand for the special steel used in tools and turbines, which have largely ridden out the recession. The growth in its key market specialisms – alloy products used in the automotive, railway and pipeline industries – has enabled Austria to buck the trend seen elsewhere in the EU.
A significant risk factor is the effect on the economy from turbulence in the financial markets and the European sovereign debt crisis. Just as exports helped stimulate output in 2010, dependence on EU markets still poses a downside risk, while key markets remain at risk of downturn due to the effects of austerity measures. Between 60-80% of Austrian aluminium and steel production is exported, with the automotive industry comprising around 25% of sales.
In response to the worsening external environment, Voestalpine announced that it had cut steel production by 10% in November. It could make further cuts in January based on projected output for the year ahead with the expectation of tough steel price negotiations for supplies in 2012. The performance of the automotive industry could be crucial to determining Austrian steel production, although BMI remains less pessimistic about the potential in other segments.
Nevertheless, we forecast a decline in crude steel output of 5.4% to 7.17mn tonnes in 2012, a downward revision from the 7.74mn tonnes forecast in the previous quarter. BMI has also downgraded hot rolled output growth from 1.9% to -5.0% in 2012 with production forecast to decline from 7.42mn tonnes to 7.05mn tonnes. We anticipate slow but steady growth from 2013 in line with European market trends, but capacity constraints will prevent any further significant growth in crude steel over the long-term, although BMI expects investment in downstream sectors. Domestic finished steel consumption is set to decline 5% to 3.64mn tonnes, but is set to resume growth from 2013 and by 2016 should exceed levels seen before the 2008 financial crisis.
The aluminium market is expected to mirror steel consumption although the trend will be stronger due to the reliance on consumer goods and automotive sectors, with a 7% decline in consumption to 320,000 tonnes in 2012, following growth of 15% to 344,000 tonnes in 2011. By 2016, consumption rates should exceed 381,000 tonnes.
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