Recently released market study: Sweden Metals Report Q4 2010

Oct. 20, 2010 - PRLog -- A poor export recovery for Swedish metals using industries will only be partly offset by strong domestic consumption rates, ensuring that a return to pre-crisis levels of steel and aluminium production is unlikely before 2012, according to BMI's latest Sweden Metals Report.

In the first seven months of 2010, Swedish crude steel output grew 106.4% y-o-y to 2.82mn tonnes, although output was still 15% below pre-recession norms. Output was higher that anticipated by BMI, but we foresee downside risks ahead. Better-than-expected growth has prompted us to upgrade our 2010 crude output growth forecast from 47.3% to 52.2%, but this still supposes a slowdown in growth to 19.3% y-o-y in H210 and a 32% decline in output from H110 and an anticipated slowdown in external demand from the eurozone. Hot rolled production is also expected to grow 52.0% y-o-y to 3.93mn tonnes. The effects of poor export recovery will be partly mitigated by a robust domestic credit market, which will drive a healthy recovery in local consumption. Indeed, we expect Sweden to be among the top performing Western European economies this year, with growth far outstripping that in the eurozone. However, BMI expects crude and hot-rolled output rates to plateau after 2011, as a result of saturated export markets, and only fully return to pre-recession rates by 2014. Primary aluminium production should see a faster return to normal rates. After halving output in 2009 to 40,250 tonnes, BMI expects Sweden's only primary aluminium smelter Kubal to return to 2008 rates of output in 2010, at close to 82,000 tonnes, before reaching full capacity of around 100,000tpa the following year.

However, we caution that protracted weakness in European demand will hold back export growth in the long run. As such, while exports are set to grow 25% to 2.7mn tonnes in 2010 after nearly halving in 2009, domestic consumption of finished steel products is expected to rise by just under 40%, to 4.1mn tonnes. BMI expects domestic consumption to return to near pre-recession levels in 2011, but output will be dragged down by lacklustre export performance. A reviving housing market should also bolster the local market in long products by boosting construction activity. However, we do not envisage a return to pre-recession export levels over the medium term, a situation that will be felt across the country's exportoriented industrial sector. Flat production will be badly hit by poor externalities, particularly if the domestic car industry does not return to pre-crisis production.

Poor performance in the automotive sector has depressed domestic industrial demand for flat products. In terms of consumption, a collapse in domestic industrial output and consumer demand led to a 40.2% drop in finished steel consumption to 2.60mn tonnes, while the aluminium market plummeted 58% to around 123,500 tonnes. This should be partly corrected in 2010, when finished steel consumption is forecast to grow 22.8% to 3.19mn tonnes, and aluminium consumption is set to rise 61.2% to 199,100 tonnes. We maintain that the Swedish economy's strong orientation toward external trade and government consumption, combined with increasingly positive private demand indicators bodes well for a relatively robust growth in the steel and aluminium industries in 2010.

For more information or to purchase this report, go to:
-  http://www.fastmr.com/prod/88551_sweden_metals_report_q4_...

Report Table of Contents:

Executive Summary
SWOT Analysis
- Sweden Political SWOT
- Sweden Economic SWOT
Global Overview
- Quarterly Metals Views
- Table: BMI's Core Views For The Metals Industry
- Global Market Overview
- Table: World's Top 10 Steel Producing Countries
- Table: Recent And New Smelter Capacity
- Commodities Forecast
- Nickel
- Table: BMI's Nickel Forecasts
- Table: Nickel, 2005-2011
- Aluminium
- Table: BMI's Aluminium Forecasts
- Table: Aluminium, 2005-2011
- Copper
- Table: BMI's Copper Forecasts
- Table: Copper, 2005-2011
Regional Overview
Forecast Scenario
- Table: Sweden's Metals Industry ('000 tonnes unless stated)
- Macroeconomic Outlook
- Table: Sweden - Economic Activity, 2007-2014
Competitive Landscape
- Table: Swedish Steel Capacity, 2007
- Table: Main Steel Producers in Sweden
Company Profiles
- Ovako
- Sandvik Materials Technology
- SSAB
- Outokumpu
- RUSAL United Company
Global Assumptions
- Table: Global Assumptions
- Table: Global & Regional Real GDP Growth
- Table: Consensus Forecasts
- Table: Developed States, Real GDP Growth Forecast
- Table: Emerging Markets Aggregate Growth
BMI Methodology
- How We Generate Our Industry Forecasts
- Cross Checks
Country Snapshot: Sweden Demographic Data
- Section 1: Population
- Table: Demographic Indicators, 2005-2030
- Table: Rural/Urban Breakdown, 2005-2030
- Section 2: Education and Healthcare
- Table: Education, 2002-2005
- Table: Vital Statistics, 2005-2030
- Section 3: Labour Market and Spending Power
- Table: Employment Indicators, 2001-2006
- Table: Consumer Expenditure, 2000-2012 (US$)
- Table: Average Annual Wages, 2000-2012

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Fast Market Research is an online aggregator and distributor of market research and business information. We represent the world's top research publishers and analysts and provide quick and easy access to the best competitive intelligence available.