Despite the economic slowdown, Sheffield UK based market analysts, MEPS expects world steel production to reach 1550Mt this year ? a 1.9% increase on 2011. Further gains are anticipated in 2013.

MEPS envisages that steelmaking in the European Union will decline by 4.5% in 2012 as producers continue to restrict supply in response to weak demand caused by the fragile economic situation.

Steel manufacturing in the rest of Europe is projected at 153.7Mt in 2012 - a rise of 1.3% year-on-year. Turkish steel output continues to show strong expansion. Growth in Russia will compensate for declines elsewhere in the CIS.

Crude steel output in North America is forecast at 121.8Mt in 2012. Following a strong start to the year, mills are now trimming their capacity use.

MEPS believes South American raw steel production will decline by 2.5% in 2012 to just above 47Mt. Imports have taken a greater share of local markets.

Steel production in the Middle East is projected to increase by almost 8%, compared with the outturn in the previous twelve months as new installations lift output. In contrast, a decline is foreseen in sub-Sahara Africa.

Chinese crude steel output is predicted to be 750Mt this year by MEPS, but if the official published figures are used, the estimated the outturn would be 715Mt. However, this figure is believed to be understated by at least 35Mt.

Elsewhere in Asia, raw material supply disruptions continue to constrain Indian steel production. Consequently, output is likely to grow by just 3% in 2012, compared with the previous year. Japanese steel production is expected to be little changed this year following a decline in 2011. South Korean output should be a record high figure in 2012 ? although the rise will be fairly modest following the surge witnessed in the previous twelve months.

Source: MEPS ? World Steel Outlook Q 3 2012 Source: MEPS www.meps.co.uk