Market Monitor Steel France 2017

Market Monitor

  • Fransa
  • Metal,
  • Çelik

14 Kas 2017

Export orientation and diversification are key factors for business success in a business environment characterised by overcapacity and volatile prices.

  • Demand from the construction sector has finally picked up
  • Low demand from agriculture machinery and energy sectors
  • Non-payments have decreased in 2016

 

As in 2016, in 2017 the French steel and metals sector has continued to benefit from higher sales prices, EU anti-dumping measures targeting foreign (Chinese) steel imports and buoyant demand from the automotive sector. Demand from construction finally picked up in 2016 as building activity increased 2% - driven by government stimulus and low interest rates - and expanded further in 2017. Metal manufacturing value added growth is expected to accelerate above 2% in 2017 and 2018, despite subdued demand for metals and steel from agricultural machinery and the oil and gas sector, as the global economic environment is expected to remain benign and  French GDP is forecast to grow more than 1.5%.

However, overcapacity remains an issue in French steel trading activity. Although profit margins have increased over the last 12 months, operating margins generally remain low for many small players, especially smaller steel/metals traders, wholesalers and processors. Some smaller businesses, however, are able to operate in niche segments that provide higher margins.

Steel businesses are generally highly dependent on bank finance, either due to high capital expenditures when operating upstream and/or the need for short-term facilities to finance working capital requirements and inventories. Currently the willingness of banks to provide credit to the sector can be described as neutral. Financing will remain a key element in the coming months due to higher steel and metals prices.

Payment delays decreased in 2016, and the level of steel/metals insolvencies is not overly high. This is mainly because many steel and metals traders and wholesalers are able to adapt with a flexible cost structure. That said, the foundry segment and steel and metals businesses that are dependent on the oil and gas industry as their end-market still face difficulties.

Our underwriting approach remains neutral for the time being. However, conditions can change quickly in this industry characterised by both overcapacity and volatile prices, especially if decreasing revenues and margins are not bolstered (in time) by prudent cost management. Export orientation and customer diversification remain key factors for business success in the French steel and metals sector.

İlgili dökümanlar

Yasal Uyarı

Buradaki beyanlar yalnızca genel bilgi sağlama amacını taşımakta olup hiçbir amaç için güvenilmemelidir. Tabi olduğu koşullar için lütfen gerçek ilkeye ya da ilgili ürün veya hizmet anlaşmasına başvurun. Buradaki hiçbir unsur, alıcılara dair ya da sizin adınıza gerekli özenin gösterilmesi yükümlülüğü dahil Atradius tarafında hiçbir hak, yükümlülük, tavsiye ya da sorumluluk oluşturduğu şeklinde yorumlanamaz. Atradius, herhangi bir alıcı hakkında detaylı durum tespiti yaparsa, bu, sigortalı ya da başka birilerinin menfaati için değil, kendi sigortalama prensipleri doğrultusundadır. Ayrıca, hiçbir durumda Atradius ve hiçbir bağlı ortaklık ve yan kuruluşu buradaki beyanlarda bulunan bilgilerin kullanımından kaynaklanan doğrudan, dolaylı, özel, arızi ya da nihai zarardan sorumlu olmayacaktır.