Boston, MA -- (SBWIRE) -- 12/12/2012 -- BMI's Romania Metals Report for Q4 2012 examines the latest developments in the country's steel and aluminium industries and whether ongoing investment will be sufficient to boost production and improve the country's competitive advantage in the years ahead. The report examines how producers are minimising investment risk and also explores the impact of the increasingly precarious external macroeconomic environment on Romanian consumption. The growth and risk management strategies being employed by the leading players in the steel and aluminium sectors are also analysed, as they seek to maximise the growth opportunities offered by the local automotive and construction sectors.
In the first seven months of 2012 Romanian crude steel output grew 5.6% year-on year (y-o-y) to 2.31mn tonnes (mnt) with monthly output sustained at the levels seen in H211. Steel exports are benefiting from a depreciation of the leu against the euro, sustaining its competitive edge against Western European producers. The automotive industry retains its importance for the Romanian steel industry, with flat products making up 62% of hot-rolled output and much of that production dedicated to serving the car industry. Automotive production will be boosted by an increase in capacity at Ford's Craiova plant, which is set for significant expansion in 2013.
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Going forward, production will be supported by a resumption of activities by Mechel, whose Romanian plants were affected by temporary shut-downs in early months of the year. Mechel's production has been gradually ramping up since a new 810,000 tonnes per annum (tpa) capacity EAF was commissioned at Otelu Rosu earlier in 2011. Output will also be held up ArcelorMittal's 2mntpa No.5 furnace remains operational following an EUR80mn investment. BMI believes that the No.5 furnace will operate at maximum capacity through 2012. Meanwhile, ArcelorMittal Galati completed construction of a new rolling mill in Hunedoara in July with 400,000tpa capacity producing long carbon steel products.
Additionally, the company is increasing liquid steel production to 700,000tpa to raise output of round semis at its Tubular Products Roman plant. These downstream projects will boost the value of Romanian steelmaking and enhance efficiency and competitiveness. Going forward, there are doubts over when Transdanube Industries' planned steel mill, designed with capacities of 500,000tpa crude steel and 450,000tpa of concrete steel, will come onstream. The eurozone crisis has appeared to have had a delay in start-up, which was due in mid-2013, prompting BMI to revise down crude steel output forecasts.
- With output likely to remain steady through 2012, BMI has upgraded its crude steel growth forecast from 1% to 3%, with crude output rising to 3.95mnt, an upward revision from 3.87mnt previously forecast.
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