The Worldsteel Association, which includes almost all of the global steel producers, released its October 2012 Short Range Outlook (SRO) for 2012 and 2013. Steel demand will slow down further in 2013: it will only be 2% in 2012, 3, 2% in 2013, against 6% over last year.
What strikes first is the slowdown in emerging countries: 3% additional steel consumption in 2012, a little more next year. It is far from the 10% growth a year for the last ten years. Among these countries, it’s in China that the growth will slow down most. Steel demand in China is expected to increase by 2.5% to 639.5 Mt in 2012 after 6.2% growth in 2011. In 2013, Government stimulus measures are likely to moderately improve the economic situation. This follows sluggish exports resulting from the global economic slowdown. Thus China’s apparent steel use is expected to rise by 3.1% and will reach 659.2 Mt in 2013.
In the industrialized world, the picture is quite different from country to country: North America is expected to grow by a healthy 7.5% in 2012 to 130.4 Mt, due to improvements in construction activities and a strong performance from the automotive industry but in 2013 steel demand growth will slow to 3.6%. Apparent steel use will reach 135.1 Mt in 2013.
In Europe, steel consumption will fall much more than expected: apparent steel use in EU 27 is expected to decline by -5.6% in 2012. A quarter to a third of the demand has gone over 2007. The European steel industry is in overcapacity and this situation could last five years up to ten years in Spain (-11.9% in 2012), where the housing bubble burst with violence and where mills have been halted, and Italy (-12.6% in 2012). The most resilient country Germany will also experience a decline of -4.7% in 2012. In 2013, the situation is expected to improve and steel demand in EU 27 will recover by 2.4%.