Signs of steel market recovery?

As ArcelorMittal report improving profits [see http://uk.news.yahoo.com/arcelormittal-cautiously-optimistic-2014-prospects-062335547--finance.html#tJMPAt2], should we assume that European steel is on the road to recovery?

European steel demand is expected to grow by up to 4 per cent this year, compared to a decline in demand of 0.6 per cent last year. The United States, ArcelorMittal's largest market, is expected to do even better, up by as much as 4.5 per cent in 2014 compared to a contraction of 0.5 per cent during last year. For discussion about this, see http://www.thisismoney.co.uk/money/markets/article-2554313/Steel-giant-ArcelorMittal-pins-hopes-Europe-US.html?ITO=1490&ns_mchannel=rss&ns_campaign=1490

Nonetheless, with steel demand increases of 4-5 per cent plus additional price improvements (feeding straight through to the bottom line) 2014 should indeed be a much better year for the big steelmakers.

EU steel demand growth - not till 2014

According to Eurofer, a very weak first quarter in 2013 [caused by depressed demand, and exacerbated by a harsh winter and weakening exports] means that 2013 steel demand is likely to fall when compared to 2012 demand. Therefore, steel demand growth in Europe should not be expected until 2014.

Eurofer estimate the 2013 decline in steel demand at ~4.5 per cent (see http://eurofer.org/index.php/eng/News-Media/Press-Releases/Economic-Steel-market-Outlook-2013-20143). This is after consumption fell ~10 percent in 2012. The 2014 demand growth is expected to be just 2 per cent or so.

For further reading, see http://finance.yahoo.com/news/eu-steel-demand-only-return-112000883.html