UMC 0.00% $1.30 united minerals corporation nl

bhp know - world steel demand to grow in 2010

  1. 6,111 Posts.
    World Steel Association sees 9.2% steel use growth expected after 8.6% drop in 2009
    Tom Stundza -- Purchasing, 10/12/2009 9:20:26 AM
    World steel demand will grow in 2010

    The World Steel Association (worldsteel) forecasts that global steel demand will grow 9.2% to 1.206 billion metric tons in 2010 after declining 8.6% to 1.104 billion in 2009. The group of steel-producing companies earlier had projected this year's drop at 14.1% but that was adjusted "due to the exceptionally strong growth in steel demand in China." That country is expected to account for 47.7% of apparent world steel use. Excluding China, projected world steel demand would have fallen by 24.4 %.

    "There are clear signs that the bottom has been reached in the market," Ian Christmas, the group's director general, says in a Bloomberg interview at the annual meeting in Beijing today. In a statement, Daniel Novegil, chairman of the group's economics committee, notes "the global recovery is stronger" than had been expected. That's why steelmakers are restarting output at mills in China, Europe and the U.S.

    The worldsteel 2010 forecast is for "moderate global steel demand," though, with Novegil noting: "As before the financial crisis, the emerging economies, especially China, will be the critical factor in driving world steel demand in the near future." Emerging economies are using 17% less steel in 2009 but will show 12% growth in 2010. In contrast, apparent steel use in developed economies will contract 34% in 2009 but will show 15% growth in 2010. "While the state of the global economy has improved, uncertainties and concerns regarding the resilience of the recovery still remain with the possibility of any premature reduction in government stimulus actions," Novegil adds.

    China is expected to show an end-use rebound of 19% in 2009 from 2.7% growth in 2008, buoyed by the government $586 billion stimulus program, and then rise another 5% in 2010 to 552.6 million metric tons. However, Novegil says uncertainty about China's rate of growth is due to questions about the overall Chinese economy in 2010, "whose fast recovery in 2009 was largely enabled by such strong government stimulus policies."

    The worldsteel report notes that India has "remained relatively resilient to the global crisis" since apparent steel use is expected to grow by 8.9% in 2009 and 12.1% in 2010. Conversely, the NAFTA (North American Free Trade Agreement) region is expected to show a 35.8% decline in apparent steel use in 2009 and then a positive 17.1% growth in 2010.

    Apparent steel demand in the U.S. is likely to fall by 38.7% to 60 million metric tons in 2009 after falling by 8.2% in 2008. "Use should recover to 72 million metric tons in 2010 with a growth rate of 18.8%," Novegil adds.

    The EU-27 economies were also severely affected by the crisis and apparent steel use in the European Union's 27-country region is expected to fall by 32.6% in 2009 to 122 million metric tons. In 2010, the apparent steel use in EU-27 is expected to grow by 12.4%.

    "For both NAFTA and EU-27, the level of apparent steel use that is expected in 2010 amounts to what was achieved back in 1991, demonstrating the severity of the impact of the crisis on the steel industry," Novegil says

    His report adds that Japan will see its apparent steel use decline by 31.3% this year, and then recover by 15.8% in 2010 to reach 61 million metric tons. Apparent steel use in the CIS (Commonwealth of Independent States) region is expected to contract by 30.8% in 2009 and then grow in Russia, Ukraine and Kazakhstan by only 8.2% in 2010.
 
watchlist Created with Sketch. Add UMC (ASX) to my watchlist

Currently unlisted public company.

arrow-down-2 Created with Sketch. arrow-down-2 Created with Sketch.