Declining European steel consumption is expected to bottom out during the first half of this year which could be positive news for owners of dry bulk carriers that transport steel products and raw commodities used to produce the material.
Real steel consumption is forecast to grow 0.3% year on year in 2010, with 2011 expected to see growth of 4.5%, according to the latest report from the European Confederation of Iron and Steel Industries.
"The latest forecasts from Eurofer's Economic Committee signal that the trough in the cycle will be reached during the first half of 2010," it said in its report, Economic and Steel Market Outlook 2010-2011.
"The slow but gradual improvement in business conditions during the year will translate into year on year growth in real steel consumption turning slightly positive again from the third quarter of 2010 onwards."
This matches bullish predictions from shipbrokers that more steel-making products will be shipped this year – on the fleet of 7,400 dry bulk carriers – after signs in late 2009 that the European industrial sector was heading out of recession.
Risking European imports of iron ore and coking coal, both used to make steel were reported in the last quarter of 2009 as mills replenished stockpiles, having run them down following the collapse of Lehman Brothers and the credit crunch kicking in during the second half 2008.
This higher demand for iron ore, which accounts for a third of all seaborne dry bulk trade, along with strong Chinese imports, led brokers to predict that more than 1bn tonnes will be transported by ship this year.