Despite strong growth in H110, the Romanian steel industry is being weighed down by both a contraction in the domestic market, and a slowdown in growth in the eurozone, which could combine to undermine output in all segments over the remainder of 2010, and going into 2011, according to the latest Romania Metals Report.
In the first seven months of 2010, Romanian crude steel output grew 51.5% y-o-y to 2.12mn tonnes. Unlike elsewhere in Europe, monthly steel output held up throughout the period, reaching 370,000 tonnes in July, the highest level since October 2008. However, output was still little over 60% of full operational capacity. The rate of economic decline in Romania has been slowing in recent quarters, suggesting that a recovery is getting underway. This is supported by similar improvements in leading indicators, which suggest that economic conditions continue to stabilise. That said, we caution that the recovery will remain fragile, with weaker external demand and the overhang of high unemployment preventing a return to precrisis rates of growth. Warning signs are evident, with GDP growing just 0.3% q-o-q, down 0.6% y-o-y in Q210. In June, Minister of Public Finance Sebastian Vladescu warned that the economy would remain in recession in 2010 with growth in 2011 at a meagre 0-1% and the government implements its programme of fiscal restraint.
The impact of the country’s economic recession is uneven, but appears to be affecting larger consumers of metal, such as the construction industry – a significant consumer of long steel production. Long products represent around 26% of total hot rolled output in Romania. Poor performance in the construction sector has had a deleterious impact on the production of long steel products such as reinforced bars, construction profiles and cold roll-formed sections. The report estimates that concrete reinforcing bar output fell 48.7% y-o-y in 2009 to 406,485 tonnes, and will only experience a modest export-led recovery of 3.7% to over 420,200 tonnes in 2010. A serious recovery is only likely from 2011, when the domestic market picks up. Meanwhile, the country’s export-oriented automotive industry is crucial to determining the market in flat products, which comprise over 70% of hot-rolled production volume. On the production side, the fading of car scrapping measures clouds the immediate outlook, at a time when credit remains tight and governments are looking to reel in stimulus measures.
Despite the poor prospects for the Romanian steel market over the next few months, investment continues to grow as steelmakers regard the country as well positioned to cater for a medium-term recovery in EU demand. ArcelorMittal Galati is planning to double its production capacity to more than 4.2mn tpa from January 2011, when the EUR53mn upgrade of its blast furnace No. 5 will be completed. It is also proceeding with the construction of a new steel mill in Hunedoara with a new EUR43mn rolling mill due to come online by 2012. The company is also increasing liquid steel production to 700,000tpa to increase output of round semis used at its Tubular Products Roman plant.

Read the article on CompaniesAndMarkets.com

Romania Metals Report Q4 2010 (Business Monitor International)

Despite strong growth in H110, the Romanian steel industry is being weighed down by both a contraction in the domestic market, and a slowdown in growth in the eurozone, which could combine to undermine output in all segments over the remainder of 2010, and going into 2011, according to the latest Romania Metals Report.
In the first seven months of 2010, Romanian crude steel output grew 51.5% y-o-y to 2.12mn tonnes. Unlike elsewhere in Europe, monthly steel output held up throughout the period, reaching 370,000 tonnes in July, the highest level since October 2008. However, output was still little over 60% of full operational capacity. The rate of economic decline in Romania has been slowing in recent quarters, suggesting that a recovery is getting underway. This is supported by similar improvements in leading indicators, which suggest that economic conditions continue to stabilise. That said, we caution that the recovery will remain fragile, with weaker external demand and the overhang of high unemployment preventing a return to precrisis rates of growth. Warning signs are evident, with GDP growing just 0.3% q-o-q, down 0.6% y-o-y in Q210. In June, Minister of Public Finance Sebastian Vladescu warned that the economy would remain in recession in 2010 with growth in 2011 at a meagre 0-1% and the government implements its programme of fiscal restraint.
The impact of the country’s economic recession is uneven, but appears to be affecting larger consumers of metal, such as the construction industry – a significant consumer of long steel production. Long products represent around 26% of total hot rolled output in Romania. Poor performance in the construction sector has had a deleterious impact on the production of long steel products such as reinforced bars, construction profiles and cold roll-formed sections. The report estimates that concrete reinforcing bar output fell 48.7% y-o-y in 2009 to 406,485 tonnes, and will only experience a modest export-led recovery of 3.7% to over 420,200 tonnes in 2010. A serious recovery is only likely from 2011, when the domestic market picks up. Meanwhile, the country’s export-oriented automotive industry is crucial to determining the market in flat products, which comprise over 70% of hot-rolled production volume. On the production side, the fading of car scrapping measures clouds the immediate outlook, at a time when credit remains tight and governments are looking to reel in stimulus measures.
Despite the poor prospects for the Romanian steel market over the next few months, investment continues to grow as steelmakers regard the country as well positioned to cater for a medium-term recovery in EU demand. ArcelorMittal Galati is planning to double its production capacity to more than 4.2mn tpa from January 2011, when the EUR53mn upgrade of its blast furnace No. 5 will be completed. It is also proceeding with the construction of a new steel mill in Hunedoara with a new EUR43mn rolling mill due to come online by 2012. The company is also increasing liquid steel production to 700,000tpa to increase output of round semis used at its Tubular Products Roman plant.

Read the article on CompaniesAndMarkets.com

Postat de pe data de 1 nov., 2010 in categoria România în lume. Poti urmari comentariile acestui articol prin RSS 2.0. Acest articol a fost vizualizat de 812 ori.

Publica un raspuns