International Predictions

Steel consumption growth forecast

Global steel demand could be affected by China's current growth phase and the Eurozone's debt crisis
The World Steel Association (worldsteel) forecasts that global apparent steel use will increase by 3.6% to 1,422 million tones in 2012, following growth of 5.6% in 2011. In 2013, it is forecast that world steel demand will grow by 4.5% to around 1,486 million tones.
Affecting this is the fact that China is entering a less steel-intensive growth phase and the fact that eurozone debt crisis uncertainties continue to persist.

World steel demand achieved solid growth of 5.6% in 2011 due to the recovery momentum seen in the first half of the year. The forecast suggests that by 2013, steel use in the developed world will still be at 14% below the 2007 level whereas in the emerging and developing economies, it will be 45% above. In 2013, the emerging and developing economies will account for 73% of world steel demand in contrast to 61% in 2007.

Hans Juergen Kerkhoff, chairman of the worldsteel Economics Committee, recently told the Media that although we saw a series of negative events in 2011 (Japan's earthquake, political turmoil in MENA and flooding in Thailand), their impact proved to be contained mostly locally. “Signs of stability are now emerging and we expect the recovery to resume in the second half of 2012, leading to a higher growth forecast for 2013.

“Although the global impact of the euro zone debt crisis has been limited so far, uncertainties continue to exist and this remains the key downside risk to our current outlook. High oil prices and geopolitical tensions in the oil producing regions are also important risk factors. 

“The possibility of a hard landing for the Chinese economy cannot be ignored but at this point we do not attach high probability to this.  The most important development is the continuing slowdown of Chinese steel demand driven by the Chinese government's efforts to restructure the economy. However, part of China's projected slower growth is offset by improvement in other emerging markets and the strengthening recovery of the US,” said Kerkhoff.

Overall, apparent steel use in the EU is forecast to slide by -1.2% to 150.9 million tones in 2012, but a modest recovery of 3.3% is expected in 2013. These projections will bring steel demand in the EU to 155.8 million tones in 2013. The recovery of steel demand could stall in most of the EU in 2012 as the sovereign debt problems continue to act as a major drag on economic activities. In particular, the financially troubled EU countries could see their apparent steel use decline further.

See the image below for a complete breakdown of the international global apparent steel use forecast for the individual countries and regions. 

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Issue 42