Chinese steel demand to slip in 2011
According to the World Steel Association the growth in global steel demand will likely decelerate in 2011 as China tries to ease back on its own economic boom.
According to the WSA forecasters, global steel consumption will grow in 2011 by 5.3%, reaching a record 1.34 billion metric tons enough steel to build 22,333 Empire State Buildings but slower than the 13.1% growth projected by the WSA for 2010.
Chief executives and other steel dignitaries from the group are convening in Tokyo this week for the WSA annual meeting. Panel discussions and speeches began there early Monday. In conjunction with the conference, the WSA released its 2011 steel demand projections.
The organization said in its statement announcing the forecasts that "Despite the better than expected forecast for 2010, we are still cautious. Steel demand in the developed economies in 2011 will still be well below the pre-crisis peak level. The recovery so far has been mainly driven by the inventory cycle and government stimulus packages whose effects are now fading out."
When it comes to steel, China remains the story, and the story now is one of abating growth. Because it's the world biggest steelmaker and most voracious steel consumer, China has more of an impact than any other variable on the price of steel globally and therefore the profits and share prices of steelmakers in the US.
China has made moves to staunch the easy credit that had created a real estate and construction booms in its biggest cities. This, the WSA said, will cause nation steel consumption to slow down considerably in the remaining part of this year.
In 2011, the deceleration in China will continue, the WSA believes. Steel consumption in the People Republic will grow by 3.5% next year, slower than the 6.7% pace the WSA is predicting for 2010, again hemmed in by the real-estate sector but also by the phasing out of stimulus packages.
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