STEEL PRODUCTION CUTS IN EUROPE NOW BECOMING IMPERATIVE

MEPS - Steel prices:

"STEEL PRODUCTION CUTS IN EUROPE NOW BECOMING IMPERATIVE

The rise in the value of the euro in recent weeks is posing fresh problems for the European Union steel market. The Euro has risen about 20% against the dollar in the past year, and in early May it hit a four-year high against the American currency and an all time high against the Japanese Yen.

This makes EU steel exports less competitive and imports more attractive. It also makes life more difficult for EU exporters of manufactured goods, most of which contain steel.

The EU Commission's most recent survey of business conditions indicated a further worsening in April after a steep decline in March, caused in part by a deterioration in confidence over export order books. Euro-zone industrial output is showing virtually no growth so far this year, and any potential expansion could be choked off by the strong currency. So EU steel consumption, already at a fairly subdued level, might decline further if the Euro remains strong. There are now signs of easier availability of some steel products. Buyers report that mills are catching up with late deliveries, and even despatching material early in some cases."