Spain Metals Report Q1 2013
- ID: 2373642
- January 2013
- Region: Spain
- 50 pages
- Business Monitor International
BMI's Spain Metals Report for Q1 2013 examines the effects of the eurozone crisis and domestic recession on the steel industry and warns that the sector will witness a protracted downturn that could permanently affect the industry's structure. The report examines how key market segments, such as the construction and automotive sectors, are affecting consumption and production and the long-term impact on the industry.
Recovery in the Spanish steel industry will largely depend on growth in exports of manufactured goods.
Germany has been the chief target for Spanish steel exports, but the decline in the performance of the German manufacturing sector from mid-2011 is having a deleterious effect on export performance.
According to reports in Q412, ArcelorMittal was evaluating the possible reopening of one galvanised production line in its plant in Aviles in order to provide steel to local automotive industry. This indicated growing optimism that the export-oriented Spanish automotive industry was set for growth in 2013.
Acerinox also predicted a recovery in the global stainless steel market in 2013, bolstered by the automotive industry. However, the Spanish flat steel market is unlikely to recover its full momentum over the medium-term with packaging and consumer durables hit by high unemployment. At the same time,
the long steel market has been hit by the collapse in residential construction.
Over the last quarter BMI has revised the following forecasts/views:
- BMI estimates that overall output in 2012 was down 10.5% to 13.95mnt, which is worse than our forecast of a 9.0% decline. Poor performance in 2012 follows a 4.6% drop in production in 2011, when production totalled 15.6mnt.
- BMI sees the pace of economic contraction easing in 2013 to 0.5% as domestic and external demand conditions stabilise. Indeed, we expect household spending to fall by a fairly modest 0.2% and exports to increase by 2.5%. This should provide some upside to Spanish steelmaking.
- Over the longer run, we believe economic growth in Spain will prove moribund and the local steel market will fail to return to pre-recession levels of consumption. In 2012, domestic crude steel consumption is estimated to have fallen 10% to 12.6mnt and demand will remain at least 50% down on pre-crisis levels.
- Given current trends in terms of both output and the state of domestic and external markets, the industry is unlikely to return to pre-2011 levels of output until 2017, when gradual growth should see the industry return to producing 15.7mnt, which is still over 3mnt lower than the 2007 peak. SHOW LESS READ MORE >
Executive Summary 5
SWOT Analysis 6
Spain Business Environment SWOT 6
Europe Metals Overview 7
Industry Forecast 13
Table: Spain - Steel Production & Consumption ('000 tonnes, unless stated otherwise), 2009-2017 14
Table: Spain - Steel Industry ('000 tonnes, unless otherwise stated), 2003-2010 15
Macroeconomic Outlook 16
Table: Spain - Economic Activity, 2011-2016 19
Commodities Forecast 20
Monthly Metals Update 20
Table: Select Commodities: Performance & BMI Forecasts 32
Steel Forecast 33
Steel To Average US$360/tonne In 2013: Short-Term View 33
Table: Steel Forecast 33
Table: Steel Forecasts 39
Competitive Landscape 40
Company Profiles 42
Financial Data 45
Table: Xstrata - Financial Data, 2006-2011 45
Table: ArcelorMittal - Key Financial Data, 2005-2011 48
BMI Methodology 49
How We Generate Our Industry Forecasts 49
Cross Checks 49