Market Monitor Metals and Steel Belgium 2019

Demand for Belgian metals and steel is currently being impacted by the slowdown in demand from automotive and reduced investment from other manufacturing industries in Belgium and the EU. Profit margins of many businesses have decreased over the past 12 months due to increased competition. Value added growth in the iron and steel segment is expected to decrease by about 5% in 2019, with a modest 0.1% rebound forecast in 2020.

Gearing of businesses mainly depends on the subsector, e.g. while large metals and steel groups have a lower gearing, the overall indebtedness of metal traders and smaller buyers in the semi-finished goods segment is rather high. Banks are still generally willing to provide loans to Belgian metals and steel businesses.

Payments in the Belgian metals and steel sector take about 60 days on average, and the number of non-payment notifications in 2019 has been lower than in 2017 and 2018. While Belgian business insolvencies are forecast to increase 4% in 2019 and 2% in 2020, it is expected that steel and metals business failures will level off. 

Our underwriting stance is neutral for both the metals and steel segments, especially for larger groups. However, we are more cautious with businesses that depend heavily on supplies to the automotive industry. Regarding metals and steel traders interim figures are required to better follow-up their business activities.