Structural overcapacity in the industry had a negative effect on businesses´ profit margins in 2014, and this negative trend is expected to continue in 2015.
- In 2014 Belgian steel and metals businesses were negatively affected by decreased orders from their main buyer industries construction and automotive. Since the beginning of 2015 shipments have increased again, but this rebound is offset by lower sales prices. At least the sector is helped by lower commodity prices.
- The average payment duration in the steel/metals sector is 90 days. Payment delays and non-payment cases have increased in H2 of 2014, and are expected to rise further in the coming months, as the economic conditions for automotive and construction, as the main sectors for buyers of steel and metals products, are expected to remain subdued.
- Over the last couple of months we recorded increasing insolvencies, mainly in the metals manufacturing subsector. That said, steel/metals business failures are expected to level off in H2 of 2015.
- In general, our underwriting stance remains neutral for steel and metals businesses, however we have become more cautious on the metals manufacturing segment, scrutinising buyers in this subsector more closely. Even very well established metals manufacturing companies have faced or are facing problems due to limited orders.
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Market Monitor September 2015
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