However, the strength and timing of an economic turnaround remains surrounded by uncertainties and risks.

Most of them stem from internal problems and structural imbalances in the EU.

A cautious recovery
Mr Gordon Moffat director general of Eurofer said that "The recent trend in the indicators is consistent with a stabilization in economic fundamentals after months of weakening; this could pave the way for a cautious recovery later in the year. Owing to solid order backlogs and support from the weaker euro on export markets, activity across EU's manufacturing sector has been holding up relatively well."

Read more: Eurofer welcomes steel action plan

On balance, activity in the steel using sectors is seen falling by less than 1% in 2012.

The EU market
The EU market started 2012 on a positive note. End users but particularly steel service centers and distributors came back to the market to replenish selectively their depleted inventories. Orders in January and February 2012 strengthened compared with the depressed volumes booked in Q4 2011. EU mills in late 2011 adjusting their output to lower demand levels and a reduction in third country imports of most steel products was supportive to a relatively healthy supply demand situation at the start of 2012.

Q1 2012 apparent steel consumption is expected to have reached a better level than in the final quarter of 2011, but is still forecast to be almost 11% down on the same period of 2011. This pattern is expected to repeat itself in the 2nd quarter, albeit with a smaller YoY drop in demand. In the 2nd half of the year, the downward trend in demand should reverse into a gradual strengthening. In total, apparent steel consumption is projected to fall 2.7% in 2012.

A modest rebound in 2013
Mr Gordon Moffat added that "We are confident that in 2013 a further improvement in the business cycle will result in a modest rebound in real consumption and trigger some restocking. Apparent steel consumption is forecast to rise by 2.5%."