IISI short range outlook and medium
Buenos Aires— The International Iron and
Steel Institute (IISI) forecasts 2006 will be a strong year for
the steel industry with a world growth rate in Apparent Steel Use
rising from 1,029 mmt in 2005 to 1,121 mmt in 2006, an increase
of 9%. This exceeds their previous forecasts. Latest projections
for 2007 suggest a more moderate forecast growth rate of 5% from
1,121 mmt to 1,179 mmt. These figures are contained in the Short
Range Outlook for Steel Use and Medium Term Forecast.
The projections forecast by the IISI Economics Committee consider
both real and apparent steel use. Apparent steel use reflects the
deliveries of steel to the market place from the steel producers
as well as from importers. These figures may differ from the amount
of steel actually being used with the difference being added to,
or drawn from inventories.
Reflecting on the current year, China and Asia
have again dominated the world market for steel. With an increasing
expenditure on infrastructure and construction in India, IISI forecasts
the apparent steel use in India will grow 10% in 2006. However,
by far the strongest growth in apparent steel use for 2006 comes
from China with a 14% increase. As one of the major economies in
Europe, the strong recovery in Germany has contributed to the 8%
growth in apparent steel use for the EU (25) economies. IISI estimates
that this figure includes some addition to inventories as well as
a rise in real steel use. The NAFTA region has also seen strong
growth with an 8% increase in steel use. Strong demand for natural
resources, including iron ore, has contributed to the strong growth
in South America with an 11% increase in apparent steel use from
32 mmt in 2005 to a predicted figure of 36 mmt in 2006.
Looking forward to 2007, the strongest growth
region will again be China with an increase in steel use from 374
mmt in 2006 to 413 mmt in 2007. This figure, however, suggests a
more moderate growth in the Chinese use of steel. Stronger credit
control and administrative measures introduced by the Chinese authorities
will cause apparent steel use to grow by 10.4% compared to 14.4%
increase in 2006.
Medium Term Forecasts for steel demand have also
been developed by the IISI Economic Committee with forecasts for
the period to 2010 and 2010-2015. Up to 2010 world steel demand
is expected to rise 4.9% per year. Steel demand in India and China
is forecast to be 7% per year and 8.4% per year respectively during
this period. The figure for the rest of the world is 4% per annum.
Projections from 2010 to 2015, suggest a 4.2% annual growth in steel
demand for the whole world.
The IISI Executive Committee reviewed the forecasts
at its meeting in Buenos Aires. They requested the IISI Economics
Committee to study further the impact on steel use by region of
changes in the location of manufacturing. They noted that capacity
increases in China should reflect the slowing growth in the Chinese
use of steel if imbalances in steel trade are to be avoided.