Netherlands Metals Industry Update Quarter 1 2011

Includes 3 FREE quarterly updates

BMI's Netherlands Metals Report for Q1 2013 examines plans for expansion of the country's highly
integrated and competitive steel industry as it strives to increase the value of production, but flags shortterm
concerns about the impact of external market problems, notably the eurozone crisis. The report also
analyses the growth and risk management strategies being employed by the leading players in the steel
and aluminium sectors, as they seek to minimise the effects of the crisis on their operations.
In the first 10 months of 2012, Dutch crude steel output fell 0.7% to 5.74mn tonnes (mnt), which was
better than the EU average. The performance was also better than BMI had anticipated, prompting an
upward revision in the full-year estimate from 6.76mnt to 6.84mnt in spite of the estimated 0.6% decline
in GDP. This represents a decline of 1.4% following two years of growth that saw output up 4.0% and
28.5% in 2011 and 2010, respectively.
Tata Steel Europe is aiming to reduce costs by 20% in FY2012/13, while at the same time increasing
investment. It is spending EUR800mn in increasing liquid steel-making capacity at Ijmuiden by 500,000
tonnes per annum (tpa) to 7.7mn tonnes per annum (mntpa) by 2015-16 while reducing jobs by 1,000.
This should significantly improve the competitiveness of its Ijmuiden complex. As such, BMI retains an
optimistic outlook for the long-term future of the Dutch steel industry with a swift return to pre-2008
levels by 2014.


Over the last quarter BMI has revised the following forecasts/views:

A modest recovery is expected in 2013 as export markets improve and national consumption
stabilises as the country embarks on its slow recovery from recession. Crude consumption is set
to rise just 0.6%, but should be followed in subsequent years by stronger growth. The eurozone
sovereign debt crisis is set to weigh on external demand, while the government's commitment to
fiscal austerity will hurt weak domestic demand.
Tata Steel is investing EUR12mn in enhancing production of specialised corrosion resistant steel
with a new finishing line for hot dipped galvanised steel. As a result, the Ijmuiden complex will
buck the trend of capacity closures seen elsewhere in Europe and will add value to production,
reduce costs and increase volume of cold rolled products. The developments at Ijmuiden justify
an optimistic outlook for the long-term future of the industry with a swift return to pre-2008
levels of output by 2014.
The closure of the 275,000tpa ZALCO aluminium smelter in December 2011 due to poor profit
margins will raise the ratio of net imports to consumption from 33% to as much as 90%.