The World Steel Association (worldsteel)
today released its short range outlook (SRO) for 2010 and 2011.
worldsteel forecasts that apparent steel use will increase by 10.7% to
1,241 mmt in 2010 after contracting by -6.7% in 2009. This represents an
improved figure over the Autumn 2009 forecast for both 2009 and 2010.
With these projections, world steel demand in 2010 will exceed
pre-crisis levels of 2007. In 2011, it is forecast that world steel
demand will grow by 5.3% to reach a historical high of 1,306 mmt. The
resilience of the emerging economies, especially China, has been the
critical factor enabling the earlier than expected recovery of world
steel demand. The
worldsteel Economics Committee met in Beijing in March 2010 and its
deliberations took place before the impact of the increase in raw
material prices could be fully considered. The risk of increased
volatility of raw material prices remains a major concern to the steel
industry and its customers.
Commenting, Daniel Novegil, Chairman of
the worldsteel Economics Committee said, “The general picture is an
improvement on the forecast we issued in October last year. The world
steel industry now seems firmly set on a path to recovery. The emerging
economies, who in total maintained positive growth through the crisis,
will continue to show strong growth, driving world steel demand in the
future, however the current recovery in the major developed economies is
slower and the projected steel demand for them in 2011 is well below the
2007 level.”
“The recovery is not only earlier but
also stronger than expected. It was driven in large part by government
stimulus packages and recent inventory restocking. The real concern will
be how post-crisis macroeconomic policies deal with fiscal balancing and
inflationary pressures.” Daniel Novegil concluded.
China’s apparent steel use in 2010 is
expected to increase by 6.7% to 579 mmt after the impressive increase of
24.8% in 2009. The pace of economic growth and steel production seen in
the 1st quarter of 2010 suggests that apparent steel use could be even
higher than this forecast. In 2011, the growth rate will slow to 2.8%,
which will bring China’s apparent steel use to 595 mmt. In 2011, China
will account for 45.5% of world apparent steel use, compared to 48.4% in
2009.
India’s steel demand maintained stable
growth during the crisis and is expected to grow by 13.9% and 13.7% in
2010 and 2011 respectively, after 7.7% in 2009. In 2011, India’s
apparent steel use will reach 71.6 mmt.
In the NAFTA region, apparent steel use
in the US fell by -41.6% in 2009 and recorded 57.4 mmt. With the
recovery in the US economy and stock rebuilding, apparent steel use is
expected to grow by 26.5% in 2010 and then 7.5% to 78.1 mmt in 2011,
bringing its apparent steel use back to the level of 1991. For NAFTA,
the level of apparent steel use that is expected in 2011 is similar to
that of 1993.
The EU economies have seen a fall in
apparent steel use of -35.2% in 2009 with Spain and Italy hardest hit by
the collapse of their construction sectors. In 2010, the region will see
an increase of 13.7% in steel demand due to inventory rebuilding and a
slight increase in real steel use. In 2011, real demand will drive the
recovery and apparent steel use is expected to grow by 7.9% to reach
145.2 mmt, bringing it back to the level of 1997.
Japan, which experienced a fall in
apparent steel use of -31.7% in 2009, will see its steel use increase by
10.3% in 2010, but in 2011, its steel demand is expected to stagnate
with -0.2% growth due to weakening of its major steel using sectors.
This brings Japan’s apparent steel use in 2011 to 58.6 mmt, the level
achieved in 1983.
The CIS region was another major victim
of the economic crisis due to its heavy dependence on oil revenue and
foreign capital. Apparent steel use in the region fell -28.2% in 2009
with a fall of -41.9% in Ukraine. In 2010, apparent steel use in the CIS
region will grow by 11% and then by 8% in 2011.
Turkey, which experienced a -9.4% decline in apparent steel use in 2009,
will see an increase of above 13% in 2009 and 2010.
The MENA region continued to record
positive growth in steel use in 2009 despite significant falls in UAE
and Saudi Arabia. The region’s better than average performance, despite
the decline in the oil price, is attributable to the strength of Egypt
and Iran. The region will maintain relatively resilient growth in 2010
and 2011 with apparent steel use reaching 68.2 mmt in 2011.
1: Apparent
steel use (ASU)
Short range outlook for apparent steel use, finished steel (2009-2011)
Regions |
ASU, mmt |
|
Growth
Rates, % |
2009 (e) |
2010 (f) |
2011 (f) |
|
2009 (e) |
2010 (f) |
2011 (f) |
|
|
|
|
|
|
|
|
European Union (27) |
118.4 |
134.6 |
145.2 |
|
-35.2% |
13.7% |
7.9% |
Other Europe |
23.9 |
27.2 |
30.4 |
|
-12.5% |
13.5% |
11.9% |
C.I.S. |
35.8 |
39.8 |
43.0 |
|
-28.2% |
11.0% |
8.0% |
N.A.F.T.A. |
80.9 |
99.9 |
107.1 |
|
-37.4% |
23.5% |
7.2% |
Central & South America |
33.6 |
40.4 |
43.1 |
|
-24.1% |
20.0% |
6.7% |
Africa |
26.4 |
28.7 |
31.3 |
|
9.6% |
8.6% |
9.3% |
Middle East |
40.7 |
44.7 |
48.4 |
|
-8.0% |
10.0% |
8.2% |
Asia
& Oceania |
761.5 |
825.7 |
857.7 |
|
8.7% |
8.4% |
3.9% |
World |
1,121.2 |
1,240.9 |
1,306.2 |
|
-6.7% |
10.7% |
5.3% |
China |
542.4 |
578.7 |
594.9 |
|
24.8% |
6.7% |
2.8% |
BRIC |
640.9 |
692.0 |
720.7 |
|
17.5% |
8.0% |
4.1% |
MENA |
57.5 |
62.9 |
68.2 |
|
0.8% |
9.5% |
8.4% |
World excl. China |
578.8 |
662.2 |
711.3 |
|
-24.5% |
14.4% |
7.4% |
World excl. BRIC |
480.3 |
548.9 |
585.6 |
|
-26.8% |
14.3% |
6.7% |
Source: World Steel Association |