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New Market Study Published: Belgium Metals Report Q4 2012

Fast Market Research recommends "Belgium Metals Report Q4 2012" from Business Monitor International, now available


Boston, MA -- (SBWIRE) -- 01/01/2013 -- BMI's Belgium Metals Report for Q412 examines the long-term effects of the economic crisis on the country's steelmaking capacities and warns that the sector will never recover.

The report examines how a collapse in domestic production will impact on the country's structure of steel trade and explores the ability of exporters to take advantage of the crisis facing the Belgian steel industry. In the first seven months of 2012, Belgian crude steel output slumped 17.5% year-on-year (y-o-y) to 4.37mn tonnes (mnt), one of the worst performances in the EU. This continued the trend witnessed in Q411 when output plummeted 17.9% y-o-y. The decline reverses the gains witnessed in the early months of 2012 when capacity utilisation rates were returning to near pre-crisis levels, matched by a rebound in export receipts and rising business confidence. Furnace closures by Duferco and ArcelorMittal mean that Belgium will not return to pre-crisis volumes of production even after the market picks up.

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A decline in demand growth in export markets has dealt a blow for the Belgian steel industry. ArcelorMittal's planned permanent closure of two blast furnaces in Liege, which were shuttered in August 2011, is now inevitable and as a result the industry will not return to pre-2008 levels of production. By Q312, available crude steel capacity was limited to just over 7mn tonnes per annum (mntpa), although rolling operations remained in action. Duferco has permanently closed its Carsid site after talks with potential takeover candidates failed. This will permanently remove the 2.1mntpa of slab capacity that had been taken offline in 2008. It also ended Duferco's crude steelmaking activities in Belgium.

- ArcelorMittal's downstream operations could be subject to closure if ArcelorMittal decides that they are contributing to over-capacity and poor margins amid a collapse in European demand and a severe imbalance in the market.
- It will be 2015 at the earliest before domestic crude steel consumption exceeds 5mn tonnes again. Once more, a sharp slowdown in 2012 will mean it will take a four- or five-year period for domestic consumption to return to pre-recession levels, with 2016 consumption reaching around 5.26mn tonnes, a level more typical of the years prior to the collapse in demand.
- Economic recession combined with idling of blast furnaces confirms our forecast of a 10% contraction in crude steel output to 7.3mnt in 2012.
- BMI believes that it is unlikely that crude steel output will exceed much beyond 8mntpa over the long-term due to capacity closures, down over a quarter from the pre-2008 levels.

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