São Paulo, October 07 2013 – The World Steel Association (worldsteel) today released its Short Range Outlook (SRO) for 2013 and 2014. worldsteel forecasts that global apparent steel use will increase by 3.1% to 1,475 Mt in 2013 following growth of 2.0% in 2012. In 2014, it is forecast that world steel demand will grow further by 3.3% and will reach 1,523 Mt.
Commenting Hans Jürgen Kerkhoff, Chairman of the worldsteel Economics Committee said, “The key risks in the global economy – the eurozone crisis and a hard landing for the Chinese economy – which we identified in our last SRO issued in April, have continued to stabilise through the last 6 months. Our underlying assumption remains that the US will resolve its fiscal constraint soon. The correction in the eurozone has been more severe than we forecasted but the improvement seen recently is now expected to continue for the rest of 2013. Major emerging economies, particularly India and Brazil have not performed as hoped mainly due to key structural issues. These factors have led to a lower steel demand performance than predicted across the world, with China being the one exception. Steel demand in 2013 is now forecasted to grow in China by 6.0%. Thus, despite steel demand growing by only 0.7% in the rest of the world, total global steel demand will grow by 3.1%.
In 2014, we expect to see continued recovery in global steel demand with the developed economies overall returning to positive growth. At the same time we expect slower growth in China. With risks within the developed world receding there is some uncertainty emerging from developing countries due to unresolved structural issues, political instability and volatile financial markets. All in all, despite economic conditions for the global steel industry remaining uncertain and challenging, we are forecasting further growth for steel demand in 2014.”
Following a 2.9% increase in 2012, apparent steel use in China is expected to grow by 6.0% in 2013 to 699.7 Mt reflecting the impact of the government’s stimulus measures focused on infrastructure. However, steel demand in 2014 is expected to slow to 3.0% growth as the Chinese government’s efforts to rebalance the economy continues to restrain investment activities.
In India, steel demand is expected to grow by 3.4% to 74.0 Mt in 2013 following 2.6 % growth in 2012 as high inflation and structural problems are constraining steel using sectors’ activities. In 2014, steel demand is expected to grow by 5.6% helped by accelerated attempts to implement structural reforms.
The economic situation in Japan has improved in 2013 due to government stimulus measures and steel demand is revised up to show 0.1% growth to 64.0 Mt. However the outlook for 2014 is less positive with fears surrounding the consequences of a new consumption tax, manufacturing production relocation from Japan and rapidly escalating energy prices. Steel demand is expected to contract by -1.6%.
In the US, after growth of 7.8% in 2012 due to generally strong steel using sector activity, apparent steel use in 2013 is forecast to grow by just 0.7% to 96.9 Mt. In 2014, steel demand is expected to increase by 3.0%, aided by the improving global economy and activities in the automotive, energy and residential construction sectors. For NAFTA as a whole, apparent steel use will grow by 0.2% and 3.2% in 2013 and 2014 respectively.
In Central and South America, apparent steel use is projected to slow to a 2.8% growth in 2013 to 48.5 Mt from 3.1% in 2012. The region’s steel demand is forecast to grow by 5.0% to 51.0 Mt in 2014. In Brazil, where the economic performance has been slower than expected to-date, modest re-stocking coupled by improving capital investment is expected to bring apparent steel use growth of 3.2% to 26.0 Mt in 2013 and a further growth of 3.8% to 27.0 Mt in 2014.
In EU27, the contraction in steel using sectors continued in 2013 particularly during the first half of the year. Apparent steel use is expected to decline for the second straight year in 2013 by -3.8% to 134.9Mt after falling by -9.5% in 2012. Apparent steel use in Italy and Spain is expected to contract by -8.1% and -4.3% respectively and even in Germany, it is expected to fall by -1.6% in 2013. Signs of stabilisation in real steel use in the second half of 2013 bode well for recovery prospects in 2014. However, the pickup in EU27 is expected to remain weak with steel demand increasing only by 2.1% in 2014 to 137.8 Mt.
Despite contracting steel demand in Ukraine, apparent steel use in the CIS region is projected to grow by 3.0% reaching 58.9 Mt in 2013 due to the pickup in Russia. In Russia, public non-residential construction and the introduction of automotive stimulus measures will contribute to steel demand growth of 3.8% to 43.6 Mt in 2013. Russia’s steel demand is expected to grow further by 4.6% to 45.6 Mt in 2014 aided by the improving external environment, particularly in Europe.
In the MENA region, steel demand is expected to grow by only 1.7% to 64.3 Mt in 2013 after 2.2% growth in 2012. The slowdown is due to the continued political instability that has disrupted economic activities. In 2014, steel demand in the region is expected to grow by 7.3% to reach 69.0 Mt aided by resumption of investment projects and governments’ efforts to quell social unrest.
Notes:
- 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 16 of the world’s 20 largest steel companies), national and regional steel industry associations, and steel research institutes. worldsteel members represent around 85% of world steel production.
- The 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.
- The Short Range Outlook is provided by the worldsteel Committee on Economic Studies which meets twice a year. The Committee membership consists of chief economists from more than 40 of the worldsteel member companies. The Committee 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.
- www.worldsteel.org