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Netherlands Metals Report Q2 2011


Netherlands Metals Report Q2 2011

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Additional Information
Price $530.00
Meta Description No
Publisher Business Monitor International
Date of Report Apr 15, 2011
Quick Overview
The Dutch steel industry is set for continued growth in 2011 as demand from France and Germany offsets the effects of subdued domestic demand growth.
In 2010, the Netherlands’ crude steel output grew 28.5% year-on-year (y-o-y) to 6.67mn tonnes, with production peaking in October at 627,000 tonnes – the highest level since September 2008 – despite a more difficult export environment. The industry was still performing at just 80% of pre-recession levels in 2010, although it did not experience the slowdown expected in H2 due to healthy exports and consistent domestic industrial growth. Hot rolled output grew 22.4% to 5.53mn tonnes. The performance of the Dutch steel industry has been held back by planned repair works at blast furnace No.7 at Corus’s operations in Ijmuiden. Steel market growth generated by public spending on infrastructure and external sectors should wane in 2011 with private consumption having only limited upside potential.
In terms of the domestic market environment, consumer sentiment has been bolstered by an apparent stabilisation in the unemployment rate, which has encouraged modest growth in household spending on consumer durables and housing, thereby lifting consumption of finished metals goods. BMI estimates that Dutch finished steel consumption grew 30.6% to 3.47mn tonnes in 2010, although this was not enough to return the market to pre-recession levels. A deceleration in consumption growth in H210 appears to be a temporary blip. We have raised our finished steel consumption growth forecast for 2011 from 3.0% to 5.3% in light of expected improvements in GDP growth, which is forecast at 2.2% in 2011 and 2.3% in 2012, following an estimated 1.7% in 2010. This should ensure that Dutch finished steel consumption reaches 2008 levels by 2012. Fiscal austerity measures will remain a downside risk over the short term, preventing a full market recovery in 2011.
Domestic consumption will lag behind growth in the external sector, which will provide the main impetus for recovery in the Dutch steel industry in 2011. We expect 8.1% growth in crude steel volumes to 7.21mn tonnes and 9.3% growth in hot-rolled output to 6.05mn tonnes on the back of a 10.4% surge in exports of semi-finished and finished steel to 10.45mn tonnes. Import growth will be subdued at 3.8%.
The Dutch steel industry will continue to play on its high level of integration and competitiveness, particularly in high-value finished steel products, in order to secure its share of the recovery in eurozone steel markets. An improved outlook for economic activity in major EU trading partners such as Germany and France suggests that greater demand from inside the EU could sustain strong Dutch export growth over 2011. Over the longer run, the Netherlands' relatively competitive external sector should allow it to take advantage of rising demand in emerging markets, boosting long-term growth. While BMI does not envisage significant new capacity in the Netherlands in the next five years, producers will focus on upgrading existing production capacities in order to enhance competitiveness.
Table of Contents
Executive Summary ........................................................................................................................................ 5
SWOT Analysis ................................................................................................................................................ 6
Netherlands Political SWOT ................................................................................................................................................................................. 6
Netherlands Economic SWOT ............................................................................................................................................................................... 6
Steel To Average US$580/Tonne In 2011 ............................................................................................................................................................. 7
Table: BMI’s Steel Forecasts ................................................................................................................................................................................ 7
Table: Steel Prices (US$m/t) ................................................................................................................................................................................. 8
Commodity Strategy – Metals Update .......................................................................................................... 13
Aluminium........................................................................................................................................................................................................... 13
Copper ................................................................................................................................................................................................................ 13
Lead .................................................................................................................................................................................................................... 14
Nickel .................................................................................................................................................................................................................. 15
Tin....................................................................................................................................................................................................................... 16
Zinc ..................................................................................................................................................................................................................... 16
Gold .................................................................................................................................................................................................................... 17
Regional Overview ........................................................................................................................................ 19
Industry Forecast Scenario ........................................................................................................................... 23
Table: Netherlands Metals Industry, Historical Data and Forecasts (‘000 tonnes unless stated) 2007-2015...................................................... 26
Macroeconomic Outlook ..................................................................................................................................................................................... 27
Table: Netherlands – Economic Activity, 2008-2015 .......................................................................................................................................... 29
Competitive Landscape ................................................................................................................................ 30
Company Profiles .......................................................................................................................................... 32
Tata Steel Europe (Corus Group) ....................................................................................................................................................................... 32
Global Assumptions, Q211........................................................................................................................... 33
Table: Global Assumptions, 2009-2015 .............................................................................................................................................................. 33
Table: Regional Real GDP Growth, 2010-2013 (% change y-o-y) ...................................................................................................................... 34
Table: Selected Exchange Rates, 2010-2013 (average) ...................................................................................................................................... 34
Developed States ................................................................................................................................................................................................. 35
Table: Developed States’ GDP Growth, 2010-2013 (% change y-o-y) ................................................................................................................ 35
Emerging Markets .............................................................................................................................................................................................. 36
Table: Emerging Market’s GDP Growth, 2010-2013 (% change y-o-y) .............................................................................................................. 37
Consensus Forecasts........................................................................................................................................................................................... 38
Table: Consensus Forecasts, 2011 And 2012 ..................................................................................................................................................... 38
BMI Methodology .......................................................................................................................................... 39
How We Generate Our Industry Forecasts ......................................................................................................................................................... 39
Cross Checks ...................................................................................................................................................................................................... 39
Country Snapshot: Netherlands Demographic Data .................................................................................. 40
Section 1: Population .......................................................................................................................................................................................... 40
Table: Demographic Indicators, 2005-2030 ....................................................................................................................................................... 40
Table: Rural/Urban Breakdown, 2005-2030 ...................................................................................................................................................... 41
Section 2: Education And Healthcare ................................................................................................................................................................. 41
Table: Education, 2002-2005 ............................................................................................................................................................................. 41
Table: Vital Statistics, 2005-2030 ....................................................................................................................................................................... 41
Section 3: Labour Market And Spending Power ................................................................................................................................................. 42
Table: Employment Indicators, 2000-2005 ......................................................................................................................................................... 42
Table: Consumer Expenditure, 2000-2012 (US$) ............................................................................................................................................... 42
Table: Average Annual Wages, 2000-2012 ......................................................................................................................................................... 43




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