|worldsteel Short Range Outlook |
Paris, 12 October 2011 – The World Steel Association (worldsteel) today released its October 2011 Short Range Outlook (SRO) for 2011 and 2012. worldsteel forecasts that apparent steel use will increase by 6.5% to 1,398 mmt in 2011, following growth of 15.1% in 2010. In 2012, it is forecast that world steel demand will grow further by 5.4%.
The worldsteel Economics Committee met 7-8 September 2011 in Istanbul.
Commenting, Daniel Novegil, Chairman of the worldsteel Economics Committee said, “In the first half of 2011, we witnessed sustained momentum in the recovery of steel demand globally carrying over from 2010. This is despite a series of anticipated and unanticipated negative developments: the ongoing euro area sovereign debt crisis, the earthquakes in Japan, the political/social unrest in some countries of the MENA region leading to the related surge in oil prices and the tightening of government monetary measures in many emerging economies.
Today the global economy is facing increased uncertainty over how the ongoing turmoil in the financial markets will evolve and how it will affect the real economy. Our current forecast for 2012 assumes that developing economies continue to drive global growth and the policy response to the European sovereign debt crisis prevents increased volatility in the equity and financial markets. In light of this global economic uncertainty, our forecast should be considered as “cautiously optimistic”.
We expect to see growth performance varying widely across regions. The recovery of steel demand in the developed world will be slow while most of the emerging and developing world should continue to enjoy robust growth in their steel demand.”
China’s apparent steel use in 2011 is expected to increase by 7.5% to 643.2 mmt following 8.5% growth in 2010. In 2012, steel demand is expected to maintain 6.0% growth, which will bring China’s apparent steel use to 681.6 mmt.
In 2011, India’s steel use is forecast to grow by 4.3% to reach 67.7 mmt due to economic growth. In 2012, the growth rate is forecast to accelerate to 7.9%.
Apparent steel use in the US is forecast to rebound strongly by 11.6% in 2011. In 2012, steel use in the US is expected to grow by 5.2% to 93.8 mmt, bringing it back to 87% of the 2007 level. For NAFTA as a whole, apparent steel use will grow by 9.0% and 4.9% in 2011 and 2012 respectively.
In Central and South America, apparent steel use is forecast to grow by 4.7 % in 2011 to reach a historical high of 47.8 mmt. In 2012, the region’s apparent steel use is forecast to grow by 9.8% to reach 52.4 mmt, almost 28% higher than the 2007 level.
European countries continued to show divergent recovery paths in 2011. While steel demand in Germany and Poland are expected to grow at impressive rates, steel demand in Spain in contrast is expected to record a sluggish 1.7% recovery. Overall, apparent steel use in the EU is projected to increase by 7.0% in 2011 to 155.0 mmt. In 2012, the growth of steel demand is expected to stall in most of the European countries with the notable exception of Poland which is forecast to post an impressive 9.5% growth. Overall, apparent steel use in the EU is forecast to grow by 2.5% to around 158.9 mmt in 2012, bringing it back to only 80% of the 2007 peak.
Japan’s steel use is expected to decline by 2.7% to 61.8 mmt in 2011 due mainly to the disruptions caused by the earthquake. In 2012 apparent steel use in Japan is forecast to show a growth of 0.8% to reach 62.3 mmt, 77% of the 2007 level.
In the CIS, apparent steel use is forecast to grow by a strong 14.4% in 2011 and then by 7.5% in 2012. These projections will bring the region’s apparent steel use in 2012 to almost 60 mmt, a new high for the region.
Steel demand in MENA region is expected to fall by 0.9% in 2011, mainly due to downward revisions from North African countries. However, boosted by high oil prices, steel use in the region is forecast to resume growth in 2012 at a rate of 8.7%. Given that the political situation in the region is far from settled, there exist considerable uncertainties to the current forecasts for this region.
Our current forecast suggests that by 2012, steel use in the developed world will still be at 15% below the 2007 level whereas in the emerging and developing economies, it will be 44% above. In 2012, the emerging and developing economies will account for 73% of world steel demand in contrast to 61% in 2007.