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Europe steel market faces slow recover: Alff

Keywords: Tags  Stemcor Europe, Wilhelm Alff, International Rebar Exporters and Producers Association, Irepas, steel demand

MUNICH — European economies and steel demand will need another five years to recover, according to Wilhelm Alff, director of Zug, Switzerland-based Stemcor Europe AG.

"We will need five years to see better economies in Europe and a return of demand for steel. There is still a lot of uncertainty in the market," he said Monday at the International Rebar Exporters and Producers Association meeting and Steel Orbis conference in Munich.

Alff, who is responsible for construction steels, said that Spain will need 10 years before it sees a return to demand because of overcapacity and the current bleak situation in the construction market.

A drop in domestic consumption means that Spain needs to refocus on exports instead of imports, he said.

"Spain is now consuming less than 1.5 million tonnes per year of steel, which means another 2.5 million tonnes is overcapacity," Alff said. "A new destination now needs to be found for all these quantities."

As Europe’s biggest steel producer, Germany is in a better position than Spain, he said. Since it didn’t experience a real estate bubble before the economic crisis, demand has remained more stable there than in the southern European states.

"(German) consumption has remained stable for 15 years. It is still at a level of 4 million tonnes per year," Alff said. "But there is a lot of pressure on the German market from countries outside Germany."

With demand levels still weak, it remains a buyer’s market, he added.

"Currently, customers are in a good situation," he said. "The main four German mills are fighting for every tonne, making it perfect for consumers to sit and wait for low prices."

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