New Materials market report from Business Monitor International: "Sweden Metals Report Q2 2013"
Boston, MA -- (SBWIRE) -- 05/22/2013 -- BMI's Sweden Metals report for Q213 examines the competitive advantages of the country's steel and aluminium sectors, but warns that dependence on the automotives industry as a major consumer could prove to be a weakness amid the eurozone crisis. The report examines how producers are responding to volatile market conditions and examines trends going forward. The report also analyses the growth and risk management strategies being employed by the leading players in the steel and aluminium sectors, as they seek to maximise the growth opportunities in niche markets, such as energy plants.
The Swedish steel industry's strong recovery from the 2008-2009 crash is threatened by the eurozone crisis and there are growing concerns of a significant collapse in output. The export-oriented steel industry, which depends heavily on the market for special grades used in machine tools and the automotives sector, continued to witness a decline in 2012. This was largely the result of a corresponding worsening situation in the European automotives market where consumer sentiment was generally subdued due to fiscal retrenchment and other macroeconomic factors. A wind-down of inventory restocking, tightening government spending and base effects following the post-recession capital investment boom all put pressure on the Swedish metals industry. These issues will not go away in 2013 and will continue to put considerable downside risk on Swedish steelmaking. We stress though, that Sweden will remain one of the fastest growing economies in Western Europe through the long term, with a sustainable growth model and limited macroeconomic risks.
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Over the last quarter, BMI has revised the following forecasts/views:
- In 2012, Swedish crude steel output declined 11.5% to 4.33 million tonnes (mnt), according to BMI estimates - one of the worst performances in the EU. Our 2017 forecast for steel output has also been revised downwards, to 4.78mnt, following weak macroeconomic figures. We forecast annual average growth of 2.0% in steel production between 2013 and 2017.
- With 60% of total production comprised of alloyed steel, including stainless, the sector will continue to be influenced by the trends in the automotives industry. Further growth will depend on SSAB restarting of one of its three blast furnaces in Sweden, which had been closed due to weak market conditions. One of two blast furnaces in Oxelsoeund was shut down in mid-2011 for relining, which has been completed.
- Primary aluminium production has seen a brisk return to normal rates. However, there is a distinct possibility that potlines at Kubal will be taken offline if the automotive sector, one of its main consumers, continues to be affected by the downturn in consumer spending. BMI believes 2012 output amounted to 70,000-80,000 tonnes from the smelter.
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