Boston, MA -- (SBWIRE) -- 07/30/2013 -- Belgium's steel sector is being hit by flatlining demand from across the eurozone region, including from its main export market, Germany. Falling demand across the region has been exacerbated by an influx of cheap Chinese steel following increasing production from Chinese steel works during H1 2013 leading to overcapacity.

Pessimism surrounding future levels of demand across Europe has led to led to cut-backs being made by a number of the country's major steel producers including ArcelorMittal and Duferco. ArcellorMittal has pledged to keep its five core finishing lines open at Liege due to their ability to produce dedicated high quality products, which are still in demand within Europe. The company's ability to do so, however, is likely to rest on successful negotiations with workers unions. Furnace closures by both companies mean that Belgium will not return to pre-crisis volumes of production even after a recovery in European demand. The BMI Q3 2013 report analyses the impact this will have on Belgian steel production as a whole.

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- BMI does not foresee significant improvement in demand over the coming months; Germany, the main export market for Belgian metals, is expected to see its economy stagnate over H2 2013, putting further downward pressure on demand. We also project zero economic growth for Belgium in 2013.
- We are forecasting negative growth in Belgium steel production over the medium term. Output is set to increase by 1% y-o-y in 2013 to 8.29mnt before growth slows down to just 0.5% y-o-y in 2014 and will then decline y-o-y thereafter.
- Crude steel consumption is also expected to contract and will remain below 5mnt during the remainder of our forecast period. An average decline of 0.1% y-o-y is expected over 2013-2017 with consumption falling to 4.6mnt by the end of our forecast period

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