IISI Reveals Short-Range World Steel Outlook for 2007, 2008
10/12/2007 - The International Iron and Steel Institute releases world steel production forecasts for 2007 and 2008 during its recent 41st Annual Conference of IISI Members in Berlin.
The International Iron and Steel Institute (IISI) released steel production forecasts during its recent 41st Annual Conference of IISI Members in Berlin.
The projections forecast by the IISI Economics Committee—which address both 2007 and 2008—consider both real and apparent steel use. Apparent steel use reflects the deliveries of steel to the market place from the steel producers as well as from importers. These figures, however, may differ from the amount of steel actually being used with the difference being added to, or drawn from inventories.
IISI forecasts that 2007 will be another strong year for the steel industry, with apparent steel use rising from 1,120.9 million tonnes in 2006 to 1,197.6 million tonnes in 2007, an increase of 6.8%. The latest projections for 2008 suggest a similar global growth rate to this year, at 6.8%. These figures represent an upward percentage point revision of 0.9 for 2007 and 0.7 for 2008 over the March forecast.
Brazil, Russia, India, and China—often referred to as the BRIC countries—accounted for about 41% of global steel demand in 2006. They will again be leading the growth with an expected increase of 12.8% for 2007 and 11.1% for 2008. Overall, 77% of world growth in 2007 and 71% of growth in 2008 will take place in BRIC.
China’s apparent steel use is expected to grow by 11.4% in 2007 and by 11.5% in 2008, accounting for 35% of the world total. For India, the forecasts for apparent steel use point to an increase of 13.7% in 2007 and 11.8% in 2008.
Very positive developments are forecast for the Russian market, where projected growth of 25% for 2007 and 9.5% for 2008 is led mainly by the energy and construction sectors. Apparent steel use in Brazil is expected to increase by 15.7% for 2007 and 5.1% for 2008, with strong fixed-capital formation partly driven by public investment programs.
In the EU (27), the growth in steel demand supported by healthy developments in Germany is mitigated by adjustments in the inventory positions, leading to a growth of 4% in 2007 and 1.4% in 2008.
Steel demand in the NAFTA region appears less robust for 2007 than previously anticipated, particularly in the residential construction sector. Inventory reductions also continue to suppress growth. In 2008, improved prospects for the overall market conditions lead to positive forecasts of 4% growth.
“Although global economic risks have increased, the IISI forecast assumes that the recent credit market volatility will not move the U.S. economy into recession,” said IISI Chairman John Surma, U. S. Steel. “We are pleased to note that North Africa, South Africa and the Middle East are emerging as strong growth regions as higher energy and raw material prices associated with growth in China, as well as other developing nations, increase income and boost investments in these regions.”
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Short range outlook for apparent steel use (2006-2008) in '000 of tonnes
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% change ’05-‘06
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2006
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% change ’06-‘07
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2007
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% change ’07-‘08
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2008
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EU-27
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11.4%
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184.9
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4.0%
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192.2
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1.4%
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195.0
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Other Europe
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11.0%
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27.2
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7.8%
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29.3
|
5.7%
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31.0
|
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C.I.S.
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18.1%
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50.0
|
19.5%
|
59.8
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8.9%
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65.2
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NAFTA
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11.5%
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155.7
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-4.9%
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148.1
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4.0%
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153.9
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Central & S. America
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11.8%
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35.6
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10.9%
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39.5
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5.2%
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41.6
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Africa
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11.4%
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23.1
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8.9%
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25.1
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9.5%
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27.5
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Middle East
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9.8%
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37.3
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8.4%
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40.4
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7.5%
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43.4
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Asia (incl. Oceania)
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6.2%
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607.2
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9.2%
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663.2
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8.7%
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721.1
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World
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8.8%
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1120.9
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6.8%
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1197.7
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6.8%
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1278.6
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World (excl. China)
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8.7%
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763.5
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4.7%
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799.6
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4.4%
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834.8
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BRIC
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9.8%
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457.8
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12.8%
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516.6
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11.1%
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573.9
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World (Excl. BRIC)
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8.1%
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663.1
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2.7%
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681.1
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3.5%
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704.7
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