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
As Europes biggest steel
producer, Germany is in a better position than Spain, he said.
Since it didnt 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
With demand levels still weak,
it remains a buyers 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."