Netherlands Metals Industry Update Quarter 1 2011

  • December 2013
  • -
  • Business Monitor International
  • -
  • 42 pages

The strong rebound in Dutch steelmaking is likely to level off in 2011 as export growth, which generated much of the increase in production in 2010, cools and upside pressure on the euro erodes the competitive advantages domestic plants had enjoyed, according to this latest Netherlands Metals Report from BMI.
In 2010, the Netherlands’ crude steel output grew 29.3% year-on-year (y-o-y) to 6.72mn tonnes, with production peaking in November at 610,000 tonnes – the highest level since September 2008 – despite a more difficult export environment. The market was still performing at just 80% of pre-recession levels in 2010, although it did not experience the expected slowdown 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 market has been held back by planned repair works at blast furnace No.7 at Corus’s operations in Ijmuiden. Steel industry growth generated by public spending on infrastructure and external segments should wane in 2011, with private consumption having only limited upside potential.
In terms of the domestic industry 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 industry to pre-recession levels. A deceleration in growth in H210 reinforces our view that growth will remain stuck in a low gear over the medium term. In our view, consumption growth rates will come under pressure in the coming quarters, as some of the key drivers of the recovery are likely to lose some momentum. In 2011, we expect finished steel consumption growth of 3.0% to 3.58mn tonnes with single-digit growth expected over the remainder of the projection period.
The onset of fiscal austerity in eurozone economies should constrain consumer demand and hamper Dutch export growth. In 2010, BMI estimates that semi-finished and finished steel exports grew 25.7% yo- y to 9.46mn tonnes. Capital goods output, largely driven by German market and global demand, has far outperformed the more domestically-oriented consumer durables segments and took up the largest amount of metals activity in the Netherlands in 2010. Although sovereign risks remain prevalent, we do not foresee a renewed bout of euro-depreciation to match that seen in mid-2010.
While demand from outside the eurozone should hold up better, our bearish outlook on the US dollar means that Dutch exports could suffer from reduced competitiveness. Indeed, we have upwardly revised our euro projections for 2010 and 2011, and modestly for 2012. This is due to our expectation that interest rate differentials will keep the dollar under pressure against the euro in the coming quarters, despite lingering concerns over European sovereign debt issues.
Therefore, the increase in competitiveness enjoyed by steel exporters in 2010 is unlikely to be replicated in the near future. Export growth, which led steel production activity in 2010, will wane over the medium term and we see limited scope for domestic drivers to pick up the slack. However, over the longer run the Netherlands’ relatively competitive steel segment should allow it to take advantage of rising demand in emerging industry s, boosting long-term growth.

Table Of Contents

Executive Summary . 5
Industry SWOT Analysis 7
Netherlands Political Environment and Risk Analysis 7
Netherlands Economic Environment and Risk Analysis . 7
World Industry Overview . 8
Commodities Projection . 12
Nickel 12
Data : BMI’s Nickel Projections 12
Data : Nickel, from 2005 to 2011 14
Aluminium .. 15
Data : BMI’s Aluminium Projections .. 15
Data : Aluminium, from 2005 to 2011 . 16
Copper . 17
Data : BMI’s Copper Projections .. 17
Data : Copper, from 2005 to 2011 . 20
Regional Overview . 21

Market Projection Scenario 25
Data : Netherlands Metals Market , Historical Data and Projections (‘000 tonnes unless stated) from 2007 to 2015 27

Macroeconomic Data . 28
Data : Netherlands - Economic Activity, from 2007 to 2015 30

Competition Overview .. 31
Company Profiles 33
Tata Steel Europe (Corus Group) .. 33
World Assumptions Q1 2011 .. 34
Data : World Assumptions 35
Data : World and Regional Real Gross Domestic Product Growth % Chg Y-O-Y . 36
Data : Developed States, Real Gross Domestic Product Growth Projection 37
Data : Emerging Industry s Aggregate Growth .. 38
Data : Consensus Projections . 39
BMI Methodology 40
How We Generate Our Market Projections 40
Cross Checks 40
Country Snapshot: Netherlands Demographic Data . 41

Section I : Population 41
Data : Demographic Indicators, 2005-2030 . 41
Data : Rural/Urban Breakdown, 2005-2030 42

Section II : Education And Healthcare .. 42
Data : Education, from 2002 to 2005 .. 42
Data : Vital Statistics, 2005-2030 .. 42

Section III : Labour Industry And Spending Power . 43
Data : Employment Indicators, from 2000 to 2005 43
Data : Consumer Expenditure, from 2000 to 2012 (US$) .. 43
Data : Average Annual Wages, from 2000 to 2012 44

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