Raw material price volatility, China, the BRIC countries and consolidation were the main points of discussion at CRU’s 17th World Steel Conference in Rome.
About 150 delegates heard 23 presentations over one and a half days with session titles including Regional Markets, Steel Markets Outlook, Steel Distribution and Steel Making Costs – Evolving Fundamentals.
In the opening keynote session CRU’s Group Economist Nick Mason warned of two immediate key worries for the industry: the Japanese earthquake and tsunami, and the ongoing problems in the Middle East. This was offset by one positive: China and its continued growth.
He attempted to forecast what the effect of the tragedy in Japan would be on steel but warned that, speaking just four days after the disaster, his forecast could be unreliable.
He said after the Kobe earthquake in 1995 the reconstruction boosted growth in five of the following eight quarters. The 1995 earthquake took place in an industrialised part of the nation, while this time the north-east region is home to an automotive and technology hub. Initial reports seem to say there is more damage compared to the 1995 ‘quake.
The implications could be the industrial stoppages for the rest of the month could push Japan back into recession this quarter and could have two quarters of recession.
He believed Japan has enough mothballed fossil fuel capacity which could be restarted to make up for the nuclear shortage. He was not sure though how long it would take to restart this capacity.
He believed that longer term, in H2 the reconstruction will kick in and that four of the six quarters after that will see substantial Japanese growth.
A comprehensive review of the conference will appear in the STI May/June issue. Further articles about the event will also appear on the STI website in due course.