Market Monitor Steel Belgium 2017

Market Monitor

  • Belgium
  • Metals,
  • Steel

14th November 2017

While the profit margin development is generally stable competition remains high with Asian steel and metals businesses on international markets.

  • Belgian steel production increased in 2016, by 5.9 % year-on-year, and by 5.1% between January and August 2017, to 4,500 metric tons. The Belgian steel and metal sector has benefitted from a rebound in sales prices since H2 of 2016, coupled with higher demand from the automotive and construction sectors, which are the major buyer industries.
  • Competition remains high, especially with Asian steel and metals businesses on international markets. Profit margin development is generally stable, while financial requirements and gearing are high.
  • Payment delays have decreased in the steel and metals sector in 2016, while both the number and amount of non- payment notifications and credit insurance claims have remained rather low in 2016 and H1 of 2017. We expect both the payment and insolvency development to remain stable in H2 of 2017 and in 2018.
  • Our underwriting stance is generally open to neutral for steel and metals. Underwriting decisions are mainly made on updated information (buyer contacts) and close monitoring of iron ore and metals price developments in order to anticipate the potential impact of price changes on the financial situation of buyers. Due to price fluctuations, stock rotations and volume evolutions are in, certain cases, a better indicator to analyse a company’s performance than its turnover. In particular, the margins of the steel and metals recycling and trading segment are highly sensitive to price volatility.

 

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