The demand for steel in Europe will continue to remain weak in the current year as a result of poor offtake from both auto and construction sectors, Tata Steel Europe, which runs Corus, has said.
"The demand for steel will remain weak in Europe in 2010 and the market is unlikely to return to pre-crisis levels for several years," Kirby Adams, the CEO and Managing Director of Tata Steel Europe, said in Tata Review, an in-house magazine.
The automotive demand is expected to be hit by conclusion of European government's customer incentive schemes, Adams said, adding that there was little prospect of recovery in the construction market, especially in the UK, in the foreseeable future.
"Steel-making overcapacity in Europe could be made worse by the threat of imports from Eastern Europe, Commonwealth of Independent States and China," he said.
The problem of the steel makers across the world is going to be compounded as despite the depressed steel market, the price of raw materials increase.
"And despite the depressed steel market, iron ore and coal demand is likely to exceed supply as the Chinese domestic market continues to suck in raw materials, rising spot prices globally. Any rise in raw material prices will obviously squeeze already thin margins," he said.
