Debt Crisis Reaches Steel Industry

Debt Crisis Reaches Steel Industry / Picture: © Voestalpine AG (Blast Furnace A)

European steel producers start feeling the effects of the difficult situation on the financial markets. “For the time being, we do not expect prices to increase”, said Wolfgang Eder, CEO voestalpine, in an interview with “Financial Times Deutschland”. September did not bring any growth in demand. “Consumers’ uncertainty resulting from the debt crisis starts to affect the real economy”, Eder warned as one of the first representatives from the steel industry. However, he does not expect sharp pressure on voestalpine’s margins as commodity prices would decline in the weeks to come.

Due to the growing uncertainty, Eder predicts stagnation in steel production of the 27 EU member states in the next two years. voestalpine is preparing plans for different crisis scenarios – in the most negative case with only 60% capacity utilization. Until the end of 2011, however, the company’s plants will be fully utilized, Eder emphasized.

Apart from the current crisis he expects that the European steel industry will experience profound changes in the next 15 to 20 years. According to his forecast, annual production of the EU-15 will drop from 130 million to only 65 million tons.