OREANDA-NEWS. Fitch Ratings says the outlook for western European steel in 2016 are both negative for the sector and for issuer ratings. This reflects our expectation that import levels, particularly from China, will remain at high in 2016. In the absence of tariffs or other similar measures imports will continue to place downward pressure on EU steel prices and producer margins.

The outlook for demand from steel-consuming sectors is, however, more promising and factors in a continuing eurozone recovery. We expect all of the key steel-consuming sectors - construction, automotive and mechanical engineering - to show increasing growth in 2016. Steel consumption overall is expected to increase 2%-2.5%, moderately higher than the 1.6%-1.8% growth expected for this year. Engineering activity is expected to remain the weakest sub-sector but even here we expect growth approaching 1.5% in 2016.