Jaway Stainless Steel

SEASI forecast on steel consumption and position of emerging economies

The World Steel Association has announced the forecast of steel consumption which has been revised after the natural disaster in Japan. Overall recovery from the economic crisis was much stronger than expected. Economies in the emerging and developing countries proved to be more resilient, recovering faster and outperforming the developed economies.

Performance of steel using sectors declined substantially during the crisis with the automotive sector experiencing the most severe decline, followed by domestic appliances. However, the construction sector seemed to be less affected, but its recovery was sluggish.

The automotive industry has recovered strongly since then. However, the growth is still below its 2007 level. Moreover, the full impact of the natural disaster in Japan on global automotive industry is yet to be seen.

According to the World Steel Association, global steel demand hit 1,284 million tonnes in 2010, a rebound of 13.2%YoY. It is forecast that the steel demand will grow steadily by 6% YoY to reach 1,440 million tonnes in 2012.

Steel demand in 2010 registered double digit growth rates in many regions. In Central & South America, CIS and NAFTA demand grew by 30% y-o-y. Meanwhile, the European Union and other European countries experienced growth rate of above 20%.

Interestingly, the overall steel demand in emerging economies was not severely affected by the economic crisis. The impact was felt in 2008, but average growth rate remained positive at 1.2%. The steel demand in the region picked up quickly with an average rate of 10% and is expected to remain at around 5% YoY till 2012. Apparent steel consumption for the group without China declined substantially in 2009, by 12%, However, it picked up sharply by 17% in 2010.

Growth rate in emerging Asia registered 6.1% in 2010 and is expected to continue to grow at a moderate rate of 6.5% in 2011 and 2012. This is due mainly to the slowdown in China. Meanwhile, steel demand in emerging Asia without China registered a two-digit growth rate of 12% in 2010 and is expected to grow further by 14% in 2011 and 2012.

For China, its steel demand grew by 5% YoY in 2010 and is expected to maintain at the same rate till 2012. Steel demand in India, Thailand, Malaysia and Vietnam are forecast to increase at two digit growth rates in 2011.

The development of steel demand in the global market is mainly pulled by the resilience of the steel demand growth rate in emerging & developing economies. The share of steel demand in emerging and developing economies in the global market increased substantially from 42% (China: 16.4%) in 2000 to 74% (China: 48%) in 2009 and is expected to decline slightly to 72% in 2012 (China: 44%). This is due mainly to the slowdown in steel demand in China.