LONDON (Reuters) - A European Union industry group on Monday downgraded its 2024 steel demand outlook for the second time in a matter of months, projecting growth of 3.2%, due to geopolitical tensions, economic uncertainty and high interest rates.
The European Steel Association (Eurofer) had cut its forecast in February for steel consumption to a rise of 5.6% after previously expecting a bounce of 7.6% this year.
"The outlook for the European steel market in 2024 continues to lose momentum amidst persisting challenging conditions," Eurofer said in a statement.
The group also cut its estimate of apparent steel demand for last year to a decline of 9% from the fall of 6.3% that was forecast in February.
Apparent steel demand measures steel output plus imports net of exports and incoming material being further processed in the bloc.
Eurofer Director General Axel Eggert called for the EU to implement an effective industrial policy to help the bloc's steel industry.
"These figures underscore the urgent need for action if we want to ensure a resilient future for the European steel industry and the interconnected clean-tech manufacturing value chains," Eggert said.
Imports rose 11% in the fourth quarter and the share of imports last year was equivalent to 27% of apparent consumption, Eurofer said.
Output in steel-using sectors is expected to decline by 1% this year due to a downturn in construction, which accounts for about 35% of EU steel demand, as well as mechanical engineering and domestic appliance sectors.
The EU steel sector produces about 150 million metric tons of steel per year from 500 sites, with turnover of 130 billion euros.