Global apparent steel use will increase by 3.1 per cent to 1,527 million tonnes in 2014 following growth of 3.6 per cent in 2013, according to the Short Range Outlook (SRO) for 2014 and 2015, released by World Steel Association (worldsteel). In 2015, world steel demand will grow further by 3.3 per cent and reach 1,576 million tonnes, says the SRO. Apparent steel use reflects the deliveries of steel to the marketplace from the domestic steel producers as well as from importers.

SRO 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).

Hans Jürgen Kerkhoff, Chairman, worldsteel Economics Committee, said, “In 2013, world steel demand grew higher than our previous forecasts due to a stronger than expected performance in the developed world in the second half of the year. In particular, the recovery in the United States gained strength. In addition the downturn in the EU bottomed out and we now expect that steel demand in the Eurozone will move into positive growth in 2014. On the other hand, many emerging economies continue to struggle with structural issues and financial market volatility. This, along with China’s deceleration, is the reason for our slightly lower global growth rate forecast for 2014. In 2015, growth in most parts of the world will accelerate thanks to a continuing steady recovery in the developed economies and an improvement in the situation for the emerging economies. But China’s steel demand will further decelerate and this will prevent the broad recovery momentum from registering a higher global growth rate for 2015.”

Trends by region
Following a 2 per cent increase in 2013, because of the moderate GDP recovery as a result of “Abenomics,” apparent steel use in Japan is expected to contract by one per cent to 64.6 million tonnes in 2014 due to the consumption tax hike affecting the construction and automotive sectors negatively. In 2015, steel demand is expected to increase by 0.5 per cent. In USA, after a decrease of 0.6 per cent in apparent steel use in 2013, years 2014-2015 are expected to deliver a return to growth and recovery. Apparent steel use will grow by 4 per cent to 99.4 million tonnes in 2014 and 3.7 per cent in 2015. The impact of the Federal Reserve Bank tapering programme on the US economy has been contained so far, but future actions still remain a risk.

In Central and South America, apparent steel use is projected to grow by 3.4 per cent to 50.9 million tonnes in 2014 down from 4.3 per cent in 2013. This is forecast to slow further to 2.7 per cent in 2015 due to contraction in Argentina and a sharp slowdown in Chile. In Brazil, steel demand growth will slow to 3 per cent in 2014 and 3.2 per cent in 2015 as high inflation and interest rates continues to restrain economic growth.

After a contraction of 0.2 per cent in 2013, apparent steel use in the EU (28) is expected to grow by 3.1 per cent in 2014 to 143 million tonnes with help of the construction sector which is gradually bottoming out. Underlying trends at national level will continue to differ, but it appears that Southern Europe has passed its lowest point. A steady transition to a broader and more durable recovery will result in steel demand growth of 3 per cent in 2015. Apparent steel use in the CIS region is projected to grow by only 1.1 per cent reaching 59.5 million tonnes in 2014 due to slow investment, but will grow by 3.7 per cent in 2015 with Russian steel demand accelerating to 4.4 per cent. In the MENA region, steel demand is expected to grow by 6.1 per cent to 66.7 million tonnes in 2014. Growth in the region is strengthening as political uncertainties moderate. In 2015, steel demand in the region is expected to grow by 9.4 per cent.

Overall, apparent steel use growth in the developed economies will be above 2 per cent in 2014 and 2015. However, the developing and emerging economies will continue to grow faster than the developed economies despite their more subdued performances.

China and India
After growth of 6.1 per cent in 2013 with support from government infrastructure investment, apparent steel use in China is expected to slow to 3 per cent growth in 2014 as the Chinese government’s efforts to rebalance the economy continues to restrain investment activities. In 2015, steel demand growth is expected to further decelerate to 2.7 per cent in the country.

In India, steel demand is expected to grow by 3.3 per cent to 76.2 million tonnes in 2014, following 1.8 per cent growth in 2013, due to an improved outlook for the construction and manufacturing sectors, even though this will possibly be constrained by high inflation and structural problems. Despite uncertainties relating to the impact of upcoming elections steel demand is projected to grow by 4.5 per cent in 2015 supported by the expectation that structural reforms will be implemented.

Production during January-March
World crude steel production for the 65 countries reporting to the World Steel Association (worldsteel) was 141 million tonnes (million tonnes) in March 2014, an increase of 2.7 per cent compared to March 2013. The crude steel capacity utilisation ratio for the 65 countries was assessed at 79 per cent in March, which is 0.4 percentage points lower than the same in this month last year.

Global crude steel production by the member countries was placed at 406 million tonnes during the first three months of the ongoing calendar year 2014, showing 2.5 per cent increase over the corresponding period a year ago. Crude steel production increased 1.6 per cent to 20.7 million tonnes in India, and 2.4 per cent to 202.7 million tonnes in China.

The World Steel Association (worldsteel) represents approximately 170 steel producers (including 17 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.

SHORT RANGE OUTLOOK FOR APPARENT STEEL USE, FINISHED STEEL PRODUCTS
 
ASU (megatonnes)
Growth Rates (%)
 
2013
2014 (f)
2015 (f)
2013
2014 (f)
2015 (f)
European Union (28)
139
143
148
-0.2
3.1
3
Other Europe
37
38
40
8.5
3.9
4.2
CIS
59
59
62
2.2
1.1
3.7
NAFTA
129
134
139
-2.4
3.8
3.4
Central and South America
49
51
52
4.3
3.4
2.7
Africa
29
30
33
9.8
4.8
8.4
Middle East
48
51
55
-1.1
5.8
9.5
Asia and Oceania
992
1020
1048
4.9
2.8
2.8
World
1481
1527
1576
3.6
3.1
3.3
Developed Economies
387
397
407
-0.3
2.5
2.4
Emerging and Developing Economies
1094
1130
1170
5.1
3.2
3.5

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