Research and Markets: United Kingdom Metals Report Q2 2012 – Crude Steel Output Is Set To Decline 4.5% Y-O-Y to 9.05mnt In 2012
DUBLIN–(BUSINESS WIRE)–Dublin – Research and Markets (http://www.researchandmarkets.com/research/p4pqkt/united_kingdom_met) has announced the addition of the “United Kingdom Metals Report Q2 2012” report to their offering.
High energy costs and an increasingly hostile operating environment prompted the permanent closure of the Lynemouth primary aluminium smelter in March leaving the country with just one small smelter, while steelmaking is set to fall for a fifth consecutive year, according to BMI’s latest UK Metals Report. In 2011 UK crude steel output fell 2.3% y-o-y to 9.5mn tonnes (mnt) with the eurozone crisis and domestic uncertainty hitting production in H2. This came on top of a 3.5% decline to 9.71mnt in 2010.
With manufacturing in a weak position, this was not enough to improve output and the decline in steelmaking continued into 2012. The abrupt decline coincided with a downturn in the construction sector, with output falling 10.6% in the three months to end-January 2012 compared to the previous three months.
Production did not accurately reflect the demand situation and on the domestic market there is likely to be some restocking activity over coming months. As such, BMI expects a recovery from the lows seen in Q112, although it will not be enough to stage a recovery. Crude steel output is set to decline 4.5% y-o-y to 9.05mnt in 2012 while hot-rolled output is forecast to fall 3.5% to 7.94mnt in the same year.
Steel output remains down a third from pre-recession norms and BMI does not anticipate resurgence amid the gloomy economic climate. The beginning of a sustained recovery in the sector is expected to be delayed until late 2012 at the earliest, when we expect domestic finished steel consumption to rise 5% to 9.8mnt and exports to rise 8.7% to just under 6.8mnt. However, it will take until 2015 at the earliest for domestic and external demand to return to normal.
The UK has one aluminium smelter, RioTinto Alcan’s 43,000 tonnes per annum (tpa) plant in Lochaber, following the closure of the Anglesey and Lynemouth smelters in 2009 and 2012 respectively. The Lochaber smelter is likely to operate at close to capacity from 2012, but will be insufficient to cover domestic demand.
Companies Mentioned
– Tata Steel Europe
– Rio Tinto
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