Research and Markets: Netherlands Metals Report Q3 2009

DUBLIN--(BUSINESS WIRE)--Research and Markets (http://www.researchandmarkets.com/research/cef661/netherlands_metals) has announced the addition of the "Netherlands Metals Report Q3 2009" report to their offering. The Netherlands Metals Report provides industry professionals and strategists, corporate analysts, metals associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on the Netherlands' metals industry. Dutch steel and aluminium producers are experiencing a sharp downturn in demand amid the Netherlands' economic crisis and are unlikely to return to pre-recession levels over the foreseeable future, according to the latest Netherlands Metals Report. In the first five months of 2009, Dutch crude steel output plummeted by 51% y-o-y to 1.59mn tonnes. This came on top of a 6.6% decline in output to 6.88mn tonnes in 2008. In Q209, the Netherlands slipped deeper into recession but we see little prospect of a recovery until the beginning of 2010, at the earliest. Industrial production, exports and investment spending are feeling the brunt of the downturn at the moment, but with unemployment set to keep rising it is weak household spending that will drag the recession out into next year. Like elsewhere in Western Europe, the collapse in consumer confidence and spending power had the biggest impact on sales of large, durable goods, with sales of vehicles, home furnishing and consumer electronics down sharply. The European market situation for flat products remained unchanged throughout H109, characterised by weak demand and destocking with buyers only purchasing for immediate needs. However, by mid-2009 there were signs of price stability, indicating that the market had reached its bottom. Demand for long products has stabilised at a low level with stainless steel longs growing although prices are still under pressure in this segment. Demand for flats remains weak, with no significant improvement expected in 2009 due in large part to the collapse in the automotive industry. The analyst warns that French auto production could continue to be eroded eastwards by companies moving operations to cheaper Eastern European bases, although the government's five year loan to car makers and the consequent car makers' commitments will ensure that the fall in output is not too drastic. Nevertheless, production is likely to be mostly concentrated on small cars and to be limited to 1.90mn units by the end of 2013. This will in turn limit domestic demand for steel and aluminium flat products. As for the European markets, the Western European automotive market contracted by at least 8% due to the financial crisis. Most other Western European markets have stagnated or fallen considerably as a result. Consequently, there is little sign of a revival in metals demand from this industry. All these factors are exerting a negative pull on the Dutch steel and aluminium industries and there appears to be no sign of an upturn in output on the horizon. The metallurgical industry is strongly procyclical, with troughs and peaks running ahead of the economic trend. Bearing this in mind and based on the trends observed in H109, crude steel output is forecast to fall 47% to 3.67mn tonnes, its worst performance for decades, while hot rolled production is set to decline 43% to 3.49mn tonnes. Activity levels in the housing market and levels of spending on consumer durables are likely to remain low through 2009 due to anticipation of further falls in prices and tightening credit conditions, prompting a sharp slowdown in domestic consumption of steel and aluminium. The long-term prospects for the Dutch steel industry are also poor, with output unlikely to return to prerecession levels over the next five years. The analyst believes there is a distinct chance that some steel and aluminium capacity may be closed permanently. Meanwhile plans to raise annual capacity at the Vlissingen aluminium smelter by 30,000 tonnes per annum (tpa) to 290,000tpa by the end of 2009 are likely to be put on hold until the European market recovers to 2007 levels of demand.