A representative group has warned steel demand will be down by half in the first six months of 2009.
Eurofer, a group representing steel giants ArcelorMittal SA, ThyssenKrupp AG, Corus Group and others, said heavy contraction in the private sector automotive, construction and machinery industries is taking its toll as demand is falling and steel users have the supplies they need stock-piled already.
A fall in public sector contracts like schools, hospitals and bridges is also contributing.
“The outlook for the steel-using industries in 2009-2010 is very grim: all sectors will be seeing strongly reduced output levels, particularly in the first half of this year,” the group said.
“The latest forecasts show apparent steel consumption falling by 40 to 45 percent year on year in the first half of this year and by almost 30 percent in the whole of 2009.”
Eurofer claims one in six of 440,000 European Union steel workers have been made redundant or are on short-time hours.
Corus announced in January that it was cutting 2,500 jobs in the UK alone.