Modest growth in Dutch demand for steel in 2012 will be outweighed by a sharp drop in exports, leading to a contraction in domestic output, according to BMI’s latest Netherlands Metals Report. In 2011 Dutch crude steel output grew 4.4% year-on-year (y-o-y) to 6.94mn tonnes, on the back of growth in 2010 of 28.5% to 6.65mn tonnes. This was marginally less than the 6.98mn tonnes BMI had forecast for the year, but we have maintained our hot-rolled steel estimate at 6.59mn tonnes, an increase of 5.0% y-o-y. BMI forecasts 0.9% growth in domestic finished steel consumption to 3.62mn tonnes in 2012, but this will be outweighed by a 7% drop in exports to 9.31mn tonnes leading to a 5% decline in both crude and hot-rolled steel to 6.6mn tonnes and 6.26mn tonnes, respectively.
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. Despite increasing investment, including EUR800mn in increasing liquid steel-making capacity at Ijmuiden by 500,000tpa to 7.7mn tpa by 2015-16, Tata Steel is implementing cost-cutting measures that will lead to around 1,000 job losses. This should, however, improve the competitiveness of the company’s Dutch operations.
A strong rise in imports has accompanied the resurgence of trade in recent quarters, but this trend should decline in the coming months as private consumption abates, although this may not be to the benefit of domestic producers to expand in the Dutch market. BMI estimates 6.3% y-o-y growth in steel imports to 7.28mn tonnes in 2011, generated by public spending on infrastructure with private consumption providing a limited stimulus to import growth. In 2012, we anticipate an 8% drop in imports.
The outlook for Dutch primary aluminium production looks less favourable. The 275,000tpa ZALCO aluminium smelter was closed in December 2011 due to poor profit margins. The company was unable to pay its electricity bills and compete with growing capacity in emerging markets. In Q112, it was reportedly in talks with eight potential buyers for a takeover of all or part of the smelter in Zeeland. It is owned by Switzerland-based industrial group Klesch through its subsidiary BaseMet, which also controls two other aluminium-producing plants: Aldel in the Netherlands and Voerdal in Germany. As ZALCO is the largest smelter in the Netherlands, its closure will raise the ratio of net imports to consumption significantly, making the country heavily dependent on external supplies.
Q2 2012 Metals Report of Netherlands
Published: June 2012 No. of Pages: 44 Price: US $ 1175
Executive Summary . 5
SWOT Analysis 6
Netherlands Political SWOT .. 6
Netherlands Economic SWOT 6
Netherlands Business Environment SWOT. 7
Global Market Overview .. 8
Steel Overview 8
Table: BMI’s Steel Forecasts . 8
Table: Steel Products And Inputs – Price Data 11
Commodities Forecast .. 12
Gold . 12
Copper . 12
Aluminium 13
Lead . 14
Nickel … 15
Tin 15
Zinc .. 16
Europe Overview … 18
Industry Forecast Scenario .. 23
Table: Netherlands’ Steel Industry, 2009-2016 (‘000 tonnes, unless otherwise stated) … 23
Macroeconomic Outlook .. 25
Table: Netherlands’ Long-Term Macroeconomic Forecasts, 2013-2020 . 27
Competitive Landscape 29
Company Profiles .. 32
Tata Steel Europe (Corus Group) 32
Global Assumptions, Q212 … 33
Table: Global Assumptions, 2010-2016 … 33
Table: Global And Regional Real GDP Growth, 2010-2013 (% change y-o-y) … 34
Table: Developed Market Exchange Rates, 2011-2013 … 34
Table: Emerging Market Exchange Rates, 2010-2013 . 35
Developed States .. 35
Table: Developed States – Real GDP Growth, 2010-2013 .. 35
Emerging Markets 36
Table: Emerging Markets – Real GDP Growth. 2010-2013 37
Consensus 38
Table: BMI And Bloomberg Consensus Real GDP Growth Forecasts, 2011 And 2012 (%) 38
Country Snapshot: Netherlands Demographic Data . 39
Section 1: Population … 39
Table: Demographic Indicators, 2005-2030 39
Table: Rural/Urban Breakdown, 2005-2030 40
Section 2: Education And Healthcare .. 40
Table: Education, 2002-2005 … 40
Table: Vital Statistics, 2005-2030 40
Section 3: Labour Market And Spending Power .. 41
Table: Employment Indicators, 2000-2005 .. 41
Table: Consumer Expenditure, 2000-2012 (US$) 41
Table: Average Annual Wages, 2000-2012 .. 42
BMI Methodology … 43
How We Generate Our Industry Forecasts .. 43
Cross Checks … 43Table: BMI’s Steel Forecasts . 8
Table: Steel Products And Inputs – Price Data . 11
Table: Netherlands’ Steel Industry, 2009-2016 (‘000 tonnes, unless otherwise stated) . 23
Table: Netherlands’ Long-Term Macroeconomic Forecasts, 2013-2020 . 27
Table: Global Assumptions, 2010-2016 . 33
Table: Global And Regional Real GDP Growth, 2010-2013 (% change y-o-y) . 34
Table: Developed Market Exchange Rates, 2011-2013 . 34
Table: Emerging Market Exchange Rates, 2010-2013 . 35
Table: Developed States – Real GDP Growth, 2010-2013 . 35
Table: Emerging Markets – Real GDP Growth. 2010-2013 . 37
Table: BMI And Bloomberg Consensus Real GDP Growth Forecasts, 2011 And 2012 (%) . 38
Table: Demographic Indicators, 2005-2030 . 39
Table: Rural/Urban Breakdown, 2005-2030 . 40
Table: Education, 2002-2005 . 40
Table: Vital Statistics, 2005-2030 . 40
Table: Employment Indicators, 2000-2005 . 41
Table: Consumer Expenditure, 2000-2012 (US$) . 41
Table: Average Annual Wages, 2000-2012 . 42
