PRLog (Press Release) – Apr 17, 2011 – Belgium's stellar rise in steel and aluminium pro manual trash compactor duction in 2010 will not be sustained in 2011, as the country's low value production struggles to compete on export markets amid rising costs and more intense competition, as well as moderating demand.
The steel industry has rebounded faster than many other industrial sectors, with crude output up 43.5% to 8.09mn tonnes and hot-rolled output up 51.4% to 7.99mn tonnes in 2010, following declines of up to 50% in 2009. Domestic finished steel consumption grew 27% to 3.98mn tonnes and apparent aluminium consumption was up 30% to 181,600 tonnes, with aluminium product imports rising 21% to just under 550,300 tonnes and exports growing 20% to 465,100 tonnes. However, as Belgium's export sector is dominated by relatively low technology goods, the country will face increasing levels of competition in this area from emerging market exporters as they seek to move up the value chain. This will put downward pressure on Belgian metals industries.
Overall, Belgian industry has shown signs of recovery with growth in indu trash bins strial orders averaging 14.7% year-on-year (y-o-y) over the course of January-October 2010, having contracted 25.1% over the same period in 2009. While partly reflective of statistical base effects, the increase in capacity utilisation rates to 78.9% in Q410 from a low of 70.4% in Q209 is a sign of improving orders. The rebound in exports is down to the resurgence in German and French demand, which together account for over a third of exports. As such, sustaining the export recovery will be predicated on recovery elsewhere in the eurozone core.
Following the post-recession rebound in 2010, we expect the Belgian steel industry to slow in 2011 as a result of softening domestic demand, capacity constraints and slowdowns in demand growth in key export markets such as France and Germany. Performance in metals end-use markets in 2010 was bolstered by a stronger performance in the Belgian automotive industry, a key consumer of locally-produced metal products. Belgium ho rc helicopter market place sts five car helicop ter technology assembly plants, six truck manufacturers and more than 300 suppliers, with more than 96% of output dedicated to export markets. However, with the end of scrappage schemes in most countries in Europe, sales fell back to lower levels in H210, ending the short-term increase created by incentive packages and making the market outlook bleak. We also warn that the lingering political crisis at a time of economic uncertainty, growing public sector debt load, rising inflationary pressures and the ongoing sovereign debt crisis in the eurozone, will pose powerful headwinds for the recovery in 2011.
Though Belgian GDP data for the final quarter of 2010 are not yet available, we expect to see a slowdown in the rate of economic growth from the third quarter, in line with our view that the recovery will soften in 2011, with a negative impact on domestic consumption. We expect the economy to have expanded by 1.9% in 2010, with growth dipping to 1.7% this year. Our forecast is predicated on a slowdown in private and government consumption growth in 2011 to 1.2% and 1.0%, respectively, from 1.7% and 2.0% in 2010. This in turn will limit domestic consumption and BMI forecasts finished steel consumption growth slowing to 3.8% in 2011 from 26.9% in 2010, while aluminium consumption growth is expected to decline to 4.9% from 30.0%.
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