Insolvencies have decreased in 2014 and are expected to level off in 2015. The insolvency level in this segment is quite low.
- The Dutch steel and metals sector is highly dependent on domestic economic development, especially construction sector performance. Therefore, the industry has benefited from the economic rebound in the Netherlands since 2014. Both turnover and investments increased last year, and are expected to grow further in 2015. Production increased 1.8% in 2014.
- The profits of steel/metal businesses have increased in 2014, and are expected to level off in 2015. However, competition remains high, and many businesses still hold large stockpiles, financed with long-term debt. Existing bank facilities are usually continued, however some steel/metals businesses still have difficulties obtaining new loans.
- Payment behaviour is quite stable, and it is expected that non-payment notifications will decrease further in 2015 due to the economic rebound. However, with 90 days on average, payment terms are quite long compared to other sectors.
- Due to the economic recovery and better sector performance, we relaxed our underwriting stance in 2014. However, close monitoring of buyers is still necessary due to the very competitive business environment, which could lead to decreasing margins or even the loss of contracts/orders for some steel/metals businesses.