Short range outlook for finished steel products confirms continued strong growth

Brussels— The International Iron and Steel Institute (IISI) forecasts that the total use of finished steel products continues to show strong growth in all regions of the world. While the main focus of the growth will be in China, total world steel demand is predicted to grow 7.3% to 1,087 million metric tons (mmt) in 2006.

Data for 2005 highlights the influence of inventory reduction by steel industry customers, which will turn positive in 2006 as steel companies replenish stocks. However, with a predicted growth of 5.8% to 1,150 mmt in 2007, the global outlook for steel demand remains positive. The largest factor in this growth is the influence of China. Even with a slowing Chinese steel demand, double digit growth in China is predicted at 13% for 2006 and 12.1% in 2007. This continued growth demonstrates the essential role that steel plays in the functioning of modern society.

IISI forecasts steel use in China will grow 13% to 356 mmt this year, accounting for 32% of total steel demand in 2006. Along with China, India also shows a high steel demand growth with a predicted increase of 8% for 2006 and 2007. In other areas of the world, growth is forecast to be around 4.7% or 33 mmt, followed by reduced growth in 2007 of 2.7%.

In the European Union apparent steel use fell by 4.6% in 2005 reflecting the reduction in steel stocks. However, IISI forecasts an increase of 3.9% in 2006 and 1.5% in 2007. IISI expects economic growth in the USA will lift apparent steel use there by 5.0% in 2006 and by a further 1.7% in 2007.

Growth in the construction and automotive sectors is underpinning an anticipated 3.2% growth in Russia’s steel use in 2006 with an estimated growth of 1.6% in 2007. Similar growth rates are predicted for the Ukraine.

After a slow down of the market in 2005, the steel market in Brazil is predicted to recover in 2006 with a 9.5% increase in steel use. IISI expects a further increase of 10.9% in 2007. Figures for the whole of Central and South America are similar with forecast increases of 7.6% in 2006 and 8.7% in 2007. Predictions suggest that the Japanese market will see growth of 3.3% in apparent steel demand in 2006 with a levelling-off in 2007. The whole Asia-Pacific region will register a 3.9% growth in steel use during 2006 and a 2.1% increase in 2007.

The increasing value being placed upon steel as a material vital to society’s needs, continued innovation in the industry (producing a 50% increase in new steel grades today compared to 10 years ago), all combine to support the strong growth being seen in steel demand globally.