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
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
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.