Steelsuppliers in the UK and continental Europe are likely to transform theirapproach to the market, due to forces within the industry itself and itsassociated supply chains, predicts MEPS.

The steelsector consultancy firm – originally named Management Engineering &Production Services – says the current economic cycle is leading to’rationalisation’ in the EU steel sector.

As a result,some producers are adapting their operations in order to match the currentlevel of demand from customers in the EU and beyond.

MEPS saysthat, if the economy strengthens in the years to come, “a stronger economywill provide a significant boost to the steel industry”.

In theimmediate term, however, steel suppliers in the UK and Europe are respondingnot directly to market demand, but to other concerns.

MEPSexplains that, in the near future, “investment will be made forenvironmental upgrades and energy efficiency”.

In so doing,many producers may be able to offset their rising energy costs by cutting downon their usage, allowing the industry to continue meeting customer demandwithout significant increases to steel prices on the open market.