worldsteel Presents Short Range Outlook
04/19/2011 - The World Steel Association is forecasting that apparent steel use will increase by 5.9% to 1,359 million tonnes in 2011, and by 6.0% in 2012 to reach a new record of 1,441 million tonnes.
The World Steel Association (worldsteel) released its April 2011 short range outlook (SRO) for 2011 and 2012. worldsteel forecasts that apparent steel use will increase by 5.9% to 1,359 million tonnes in 2011, following 13.2% growth in 2010. In 2012, world steel demand is forecast
to grow further by 6.0% to reach a new record of 1,441 million tonnes.
The Short Range Outlook is provided by the worldsteel Committee on Economic Studies.
The committee, which meets twice a year, comprises chief economists from more than 40 worldsteel member companies. It considers country and regional demand estimates to compile a global overview on apparent steel use (ASU). The short range outlook is presented to the Board for their final review before publication.
Projections forecast by worldsteel consider both real and apparent steel use. Apparent steel use reflects the deliveries of steel to the marketplace from the domestic steel producers as well as from importers. This differs from real steel use, which takes into account steel delivered to or drawn from inventories.
This forecast suggests that by 2012, 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 38% above. In 2012, the emerging and developing economies will account for 72% of world steel demand in contrast to 61% in 2007.
The worldsteel Economics Committee met in Beijing in March 2011 to discuss the short range outlook, just before the natural disaster in Japan. The forecast has not been revised yet due to the difficulty of assessing the impact of the earthquake and tsunami.
“2010 saw a steady recovery of steel demand, which began in the second half of 2009 driven by stimulus packages globally, the resilience of emerging economies and an overall market recovery. In 2011, we expect to see a further 5.9% growth in world steel demand,” commented Daniel Novegil, Chairman of the worldsteel Economics Committee.
“Our forecast is based on a stable and steady recovery of the world economy,” added Novegil. “There are, however, uncertainties deriving from financial fragilities in Europe, unrest in some oil-producing countries in the Middle East and the earthquake in Japan, which could have a negative impact on the recovery and thereby affect steel demand. At our worldsteel board meeting last week the industry again expressed its condolences and support to its Japanese members.”
China’s apparent steel use in 2011 is expected to increase by 5.0% to 605 million tonnes following 5.1% growth in 2010. Given the pace of steel production in the first quarter of 2011, Chinese apparent steel use could be even higher. However, the committee expects that the Chinese government’s efforts to cool down the overheating economy, particularly the real estate sector, will impact Chinese steel demand somewhat later this year. In 2012, Chinese steel demand is expected to maintain 5.0% growth, which will bring China’s apparent steel use to 635 million tonnes.
The committee expects India to show strong growth in steel use in the coming years due to its strong domestic economy, massive infrastructure needs and expansion of industrial production. In 2011, India’s steel use is forecast to grow by 13.3% to reach 68.7 million tonnes. In 2012, the growth rate is forecast to accelerate further to 14.3%.
The rebound in apparent steel use in the US is forecast to continue with growth of 13.0% to 90.5 million tonnes in 2011, reflecting the second round of quantitative easing and new fiscal policy initiatives that gave a boost to economic activities and sentiments in industrial and energy markets. Construction markets remain at depressed levels. The committee expects apparent steel use in the US to grow by 6.9% to 96.7 million tonnes, bringing it back to 90% of the 2007 level. For NAFTA as a whole, apparent steel use will grow by 10.9% and 6.3% in 2011 and 2012, respectively.
In Central and South America, apparent steel use is forecast to grow by 6.6% in 2011 to 48.8 million tonnes. In 2012, the region’s apparent steel use is forecast to grow by 8.3% to 52.8 million tonnes, almost 30% higher than the 2007 level.
Apparent steel use in the EUis forecast to grow by 4.9% to 151.8 million tonnes in 2011 following an export-driven industrial rebound. The largest countries such as Germany and France are forecast to enjoy solid recovery in steel use mainly in the automotive and machine-building sectors. Other economies (i.e., Greece, Ireland, Portugal and Spain) are projected to show slow growth in steel use, particularly as a result of weak construction activity. In 2012, the region will see an increase of 3.7% to 157.5 million tonnes in its apparent steel use, bringing it back to 80% of the 2007 peak.
Japan’s steel use was expected to decline by -1.2% to 63 million tonnes in 2011 as stimulus measures expire. However, this forecast was prepared prior to the natural disaster, and according to the committee it is too early to fully grasp the implications of these recent events. In 2012, apparent steel use in Japan was forecast to remain around 63 million tonnes, 78% of the 2007 level. The impact of the earthquake and tsunami is likely to result in a significant downward adjustment in steel use for 2011 and upward adjustment for 2012.
Recovery of steel use in the CIShas been surprisingly strong due mainly to an unexpectedly strong rebound from steel-using sectors in Russia. As domestic demand and business investment continue to grow in the region, apparent steel use is expected to grow by 7.5% to 52.1 million tonnes in 2011 and then by 8.9% to 56.7 million tonnes in 2012.
Steel demand in the MENA regionis expected to remain stagnant in 2011, mainly due to downward revisions from North African countries. However, boosted by high oil prices, steel use in MENA is forecast to resume growth in 2012 at a rate of 7.9%. The committee notes that there are considerable uncertainties to the current forecasts, given the political situation in the region.
The World Steel Association (worldsteel) is one of the largest and most dynamic industry associations in the world. worldsteel represents approximately 170 steel producers (including 19 of the world's 20 largest steel companies), national and regional steel industry associations, and steel research institutes. worldsteel members produce around 85% of the world's steel.
