Record Highs of Iron and Steel Forecasted for 2010 and 2011: MEPS
26 July 2010, 11:28 a.m. By Alex Ltourneau Of Kitco News www.kitco.com
World steel output is expected to reach 1395 tonnes in 2010, an increase of 14 percent from 1224.3 tonnes last year and it is expected to further expand by 3.9 percent in 2011 the UK-based steel consultancy MEPS reported Monday.
The consultancy said that global steel mill activity has increased due to economic recovery in industrialized countries of the world. The 2009 economic crisis in the West led to a drop of 25 percent in global steel output. This year, figures are expected to rise to around 28 percent.
Another positive factor relates to emerging and developing nations contributing around 100 million tonnes (57 percent) of the rise in steel production this year, MEPS said.
This amount is expected to rise in the future as GDP growth is positively projected regarding steel consumption per capita in these countries.
MEPS said the global production of steel during the first quarter of 2010 was almost 1.5 million tonnes above the figure of the equivalent period during the 2008, considered the boom year.
Indications from the April/May output suggest that second quarter steel manufacturing in 2010 will rise approximately 4.5 million tonnes, MEPS said
However, the daily steelmaking rate is likely to slip during the second half of 2010. The decrease is not expected to be on the same scale as the collapse experienced in the last six months of 2008. The global economy is currently considered to be at a stable level compared to its state in 2008.
Steel output in the EU-27 picked up in the second quarter of 2010, MEPS said. Due to rising prices and a major hike in raw materials costs, consumers placed orders with the mills earlier in the year, MEPS said. This is expected to lower activity at the steel plants in the second half as end-users and distributors built up their inventories earlier on.
Steel output in non-EU Western Europe is expected to climb to 31 million tonnes in 2010. This equates to an increase of 6.4 percent, year on year said MEPS. Further growth is anticipated in 2011 as recent investment projects expand to their full potential.
Crude steel production in the CIS should expand to near 105 million tonnes in 2010. Further gains are anticipated in the following year. Domestic demand for construction has started to recover in Russia but Ukraine remains rather sluggish.
Liquid steel production in the NAFTA region improved during the first half of 2010 despite demand is now weakening.
Output will slow down in the final six months to end the year at just above 107 million tonnes (30.1 percent) above the year earlier figure of 82.4 tonnes, MEPS said.
South American steel output is forecast to expand in 2010 to a near 43 million tonnes, up 12.7 percent above the previous years figure of 38.1 tonnes. Substantial growth is anticipated for 2011 but this tonnage is likely to fall short of the peak volume in 2007, MEPS said.
Modest growth in steel production is predicted for the African continent in 2010. Further but steady improvement is also anticipated in the following year.
Steelmaking in the Middle East is thriving, the MEPS report said. With new capacity becoming available, production of crude is expected to climb to nearly 21 million tonnes, almost 20 percent up on the year earlier figure of 17.7 tonnes. Increases are expected in 2011, MEPS said.
Total Asian steel production is expected to rise by 95 million tonnes in 2010 year on year to just below 895 million tonnes bringing production to its twelfth successive annual increase. Further growth is anticipated in 2011 but at a much slower pace than in recent years, concluded MEPS.
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