Global apparent steel use will increase by 2.9 per cent to 1,454 million tonnes in 2013, following growth of 1.2 per cent in 2012, according to the Short Range Outlook (SRO) for 2013 and 2014 released by the World Steel Association (worldsteel) on April 11. World steel demand is forecast to grow further by 3.2 per cent and will reach 1,500 million tonnes in 2014.

Hans Jürgen Kerkhoff, Chairman of the world steel Economics Committee, said: “2012 was a challenging year for the steel industry with apparent steel use increasing at the slowest rate since 2009 when demand declined by 6.5 per cent. This was mainly due to the Eurozone crisis which persisted throughout 2012 and whose impact was felt further a field. On top of this, corrective macroeconomic measures in major emerging economies also contributed to a concerted slowdown globally.”

He continued, “However, in the early part of 2013, the key risks to the global economy – the Eurozone crisis, a hard landing for the Chinese economy, and the US fiscal cliff issue – have all stabilised considerably and we now expect a recovery in global steel demand to kick in by the second half, led by the emerging economies. Yet, the situation on the financial markets remains fragile and the Eurozone crisis is far from being solved as the recent events in Cyprus have again shown. In 2014, we expect a further pickup in global steel demand with the developed economies increasingly contributing to growth.”

Apparent steel use in China is expected to grow by 3.5 per cent in 2013 to 668.8 million tonnes following a 1.9 per cent increase in 2012. In 2014, steel demand is expected to grow by 2.5 per cent as the Chinese government’s measures to control investment in an effort to rebalance the economy will remain in place.

In India, steel demand is also expected to pick up and will grow by 5.9 per cent to 75.8 million tonnes in 2013 following 2.5 per cent growth in 2012 as monetary easing is expected to support investment activities. In 2014, growth in steel demand is expected to further accelerate to 7.0 per cent thanks to the reform measures aimed at narrowing the fiscal deficit, coupled with measures to improve the foreign direct investment climate.

Steel demand in Japan is expected to decline for the second consecutive year in 2013 by 2.2 per cent to 62.6 million tonnes due to contracting shipbuilding and automotive sectors despite a positive boost from the construction sector. In 2014, it is expected to contract again by 0.6 per cent. This is due to an end of fiscal stimulus and structural factors, for example, increasing relocation of production by Japanese manufacturers overseas.

After growth of 8.4 per cent in 2012 due to the automotive and energy sectors and an increasingly resilient construction recovery, apparent steel use in USA is forecast to grow by 2.7 per cent to 99.3 million tonnes due to continuing fiscal concerns. In 2014, steel demand is expected to increase by 2.9 per cent, thus exceeding 100 million tonnes with the help of positive momentum from the construction sector. For NAFTA as a whole, apparent steel use will grow by 2.9 per cent and 3.0 per cent in 2013 and 2014 respectively.

In Central and South America, apparent steel use is projected to rebound by 6.2 per cent in 2013 to 49.8 million tonnes from 2.6 per cent growth in 2012. The region’s steel demand is forecast to grow by 4.3 per cent to 52.0 million tonnes in 2014. In Brazil, a rebound in investment coupled with the end of the recent de-stocking process is expected to bring apparent steel use growth of 4.3 per cent to 26.2 million tonnes in 2013 and further growth of 3.8 per cent to 27.2 million tonnes in 2014.

SHORT RANGE OUTLOOK FOR APPARENT STEEL USE AND FINISHED STEEL PRODUCTS

Region
Million Tonnes
Growth Rates (%)
2012
2013 (f)
2014 (f)
2012
2013 (f)
2014 (f)
European Union (27)
140
139
144
-9.3
-0.5
3.3
Other Europe
35
37
38
4.1
6.1
4.1
CIS
56
58
60
3.3
2
3.8
NAFTA
131
135
139
7.8
2.9
3
Central amp; South America
47
50
52
2.6
6.2
4.3
Africa
27
29
31
7.1
8.1
7.6
Middle East
49
49
52
-1.2
0.8
6.1
Asia amp; Oceania
928
957
984
1.8
3.2
2.8
World
1413
1454
1500
1.2
2.9
3.2
Developed Economies
389
390
400
-1.9
0.4
2.3
Emerging amp; Developing Economies
1024
1063
1101
2.5
3.9
3.5
China
646
669
686
1.9
3.5
2.5
BRIC
785
814
838
1.9
3.7
3
MENA
63
65
70
2.2
3.2
7.1

In EU27, the lingering uncertainties associated with the euro crisis continued to weigh heavily on economic activities in the region, especially during the last quarter of 2012. As a result, apparent steel use in 2012 fell by 9.3 per cent with a widening gap seen at the country level. In particular, in Italy and Spain, apparent steel use contracted by over 18 per cent in 2012. With signs of stabilisation in the economic situation, recovery is expected in late 2013, but the economic prospects for the region remains weak. Steel demand in EU 27 is expected to contract further by 0.5 per cent in 2013, but will return to growth of 3.3 per cent in 2014 to reach 144.1 million tonnes.

Growth of apparent steel use in the CIS region is projected to slow to 2.0 per cent reaching 57.6 million tonnes in 2013 as the modest pickup in Russia is partially mitigated by declining demand in Ukraine and Kazakhstan. In 2014, steel demand in the region is expected to grow by 3.8 per cent to 59.8 million tonnes with the improving external environment. The resumption of energy projects and improving construction outlook is expected to support steel demand in Russia. It is forecast that steel demand in Russia will grow by 2.6 per cent to 42.9 million tonnes in 2013 and will grow further by 3.9 per cent to 44.6 million tonnes in 2014.

Steel demand in the MENA region is expected to grow by 3.2 per cent to 65.2 million tonnes in 2013 aided by reconstruction activities in the Arab Spring countries and Iraq as political turmoil in the region phases out. In 2014, steel demand in the region will further accelerate to 7.1 per cent growth to reach 70 million tonnes supported by strong construction activities.

In the meantime, total crude steel production by the 63 countries reporting to world steel was 253 million tonnes in the first two months of ongoing calendar year, marking an increase of 2.7 per cent over January-February 2012.

The World Steel Association (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 per cent of world steel production.

The projections 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.


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