Boston, MA -- (SBWIRE) -- 09/10/2013 -- Recent calls to introduce subsidies to support the European steel industry have led to suggestions that the Belgian government may move to nationalise Arcelor-Mittal's steel operations in Liege. Nationalisation may provide support for Belgium's steel sector which is being hit by flatlining demand from across the eurozone region, including from its main export market, Germany. Falling local demand has been exacerbated by an influx of cheap Chinese steel following increasing production from Chinese steel works during H1 2013 leading to overcapacity.

Pessimism surrounding future levels of demand across Europe has led to led to cut-backs being made by a number of the country's major steel producers including ArcelorMittal and Duferco. ArcellorMittal has pledged to keep its five core finishing lines open at Liege due to their ability to produce dedicated high quality products, which are still in demand within Europe. Meanwhile, the company has been looking for outside investment in the plant's additional facilities. Expected furnace closures by both companies mean that Belgium will not return to pre-crisis volumes of production even after a recovery in European demand. The BMI Q4 2013 report analyses the impact this will have on Belgian steel production as a whole.

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- BMI does not foresee significant improvement in demand over the coming months; Germany, the main export market for Belgian metals, is expected to see continued stagnation in its economy, putting further downward pressure on demand. We also project zero economic growth for Belgium in 2013.
- We are forecasting negative growth in Belgium steel production over the medium term. Output is set to decrease by 3.6% y-o-y in 2013 to 7.1mnt before falling by 2% y-o-y in 2014.
- Crude steel consumption is also expected to contract and will remain below 5mnt during the remainder of our forecast period. An average decline of 0.1% y-o-y is expected over 2013-2017 with consumption falling to 4.6mnt by the end of our forecast period

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