World steel consumption forecast for 2013 & 14

The World Steel Association (worldsteel) released its Short Range Outlook (SRO) f apparent steel consumption for 2013 and 2014 at its annual meeting held this year in Sao Paulo, Brazil.

According to the forecast made in October and April each year by worldsteel’s Economic Committee global apparent steel use will increase by 3.1% to 1475Mt in 2013 following growth of 2.0% in 2012. In 2014, it is forecast that world steel demand will grow further by 3.3% and to reach 1523Mt.

worldsteel Economics Committee chairman, Hans Jürgen Kerkhoff said: “The key risks in the global economy – the eurozone crisis and a hard landing for the Chinese economy – which we identified in our last SRO issued in April, have continued to stabilise through the past six months. Our underlying assumption remains that the US will resolve its fiscal constraint soon. The correction in the eurozone has been more severe than forecasted in April but the improvement seen recently is now expected to continue for the rest of 2013. Major emerging economies, particularly India and Brazil, have not performed as hoped mainly due to key structural issues. These factors have led to a lower steel demand performance than predicted across the world, with China being the one exception. Steel demand in 2013 is now forecasted to grow in China by 6.0%. Thus, despite steel demand growing by only 0.7% in the rest of the world, total global steel demand will grow by 3.1%.

"In 2014, we expect to see continued recovery in global steel demand with the developed economies overall returning to positive growth. At the same time we expect slower growth in China. With risks within the developed world receding there is some uncertainty emerging from developing countries due to unresolved structural issues, political instability and volatile financial markets. All in all, despite economic conditions for the global steel industry remaining uncertain and challenging, we are forecasting further growth for steel demand in 2014.”

Despite forecasts being downgraded from the April prediction all regions except EU27 are expected to see some growth. Apparent steel use in the EU is expected to decline for the second straight year in 2013 by -3.8% to 134.9Mt after falling by -9.5% in 2012. Apparent steel use in Italy and Spain is expected to contract by -8.1% and -4.3% respectively and even in Germany, it is expected to fall by -1.6% in 2013. Signs of stabilisation in real steel use in the second half of 2013 bode well for recovery prospects in 2014. However, the pickup in EU27 is expected to remain weak with steel demand increasing only by 2.1% in 2014 to 137.8Mt.

In China, following a 2.9% increase in 2012, apparent steel use is expected to grow by 6.0% in 2013 to 699.7Mt reflecting the impact of the government’s stimulus measures focused on infrastructure. However, steel demand in 2014 is expected to slow to 3.0% growth as the Chinese government’s efforts to rebalance the economy continues to restrain investment activities.
In India, steel demand is expected to increase by 3.4% to 74.0Mt in 2013 following 2.6% growth in 2012 as high inflation and structural problems are constraining steel using sectors’ activities. In 2014, steel demand is expected to grow by 5.6% helped by accelerated attempts to implement structural reforms.

In the USA, after growth of 7.8% in 2012 due to generally strong steel using sector activity, apparent steel use in 2013 is forecast to grow by just 0.7% to 96.9Mt. In 2014, steel demand is expected to increase by 3.0%, aided by the improving global economy and activities in the automotive, energy and residential construction sectors. For NAFTA as a whole, apparent steel use will grow by 0.2% and 3.2% in 2013 and 2014 respectively.

The region by region breakdown in terms of growth rates and tonnage are presented in the pdf link below