In its Short Range Outlook published yesterday, the Worldsteel association estimates that steel consumption will rebound to 1.5 billion tonnes in 2014 but European demand will not exceed 144 million tonnes, representing less than 10% of global demand.
After an increase of only 1.2% in 2012, world steel consumption is expected to rebound by 2.9% in 2013 to 1,454 million tonnes (Mt), indicate the short-term outlook published by the Worldsteel association. 2012 was a difficult year for the steel industry, with apparent steel use increasing at the slowest rate since 2009 when demand declined by -6.5%, said Hans Jürgen Kerkhoff, President of the Economic Committee of the organization. The decline was mainly due to the eurozone where apparent steel use decreased by 9.3% to 140 Mt in 2012.
“In early 2013, the major risk factors for the global economy – the eurozone crisis, a hard landing in China and the fiscal cliff in the United States – have substantially decreased and we expect now steel global demand to rebound by the second half of the year, driven by emerging economies, ” Kerkhoff said. The situation remains however fragile as demonstrated by the recent events in Cyprus. The rebound is expected to continue in 2014, with emerging economies playing an increasingly important role in growth.
In 2013, apparent steel consumption in China is expected to increase by 3.5 percent to 668.8 million mt after a 1.9 percent increase in 2012. Worldsteel‘s earlier forecast for China’s 2013 apparent steel consumption growth was 3.1 percent. Steel demand in China is expected to grow by 2.5 percent in 2014 as the Chinese government’s measures to control investment in an effort to rebalance the economy will remain in place.
The demand for steel in India is expected to grow by 5.9 percent to 75.8 million tonnes in 2013. Noting that India can grow faster, Kerkhoff told reporters that “In 2014, growth in steel demand in India is expected to further accelerate to 7 percent, thanks to the reform measures aimed at narrowing the fiscal deficit, coupled with measures to improve the foreign direct investment climate.” The growth has been strong in India for the last 20 years, though “it is wobbling at the moment”, he said.
In 2013, in the US, after growth of 8.4% in 2012 due to the automotive and energy sectors and an increasingly resilient construction recovery, apparent steel use is forecast to grow by 2.7% to 99.3 Mt due to continuing fiscal concerns. In 2014, steel demand is expected to increase by 2.9%, thus exceeding 100 Mt with the help of positive momentum from the construction sector. For NAFTA as a whole, apparent steel use will grow by 2.9% and 3.0% in 2013 and 2014 respectively.
Dragging down the global number, Worldsteel downgraded its forecast for steel consumption in the EU and the Middle East, both of which posted negative growth in 2012, with a contraction of 9.3 and 1.2 % respectively. Weighing on the EU steel demand is the gloomy economic outlook in the debt-burdened region which has reduced steel demand and pushed many producers to cut output. Worldsteel expects the EU will be the only region to a see steel use contraction in 2013, although small, at 0.5 percent to 139 million tonnes, before registering a 3.3 percent rebound in 2014.