World steel demand is expected to grow strongly this year, despite concerns about the performance of the US and EU economies, according to the industry’s world body.
Demand from the “BRIC” countries Brazil, Russia, India and China and other emerging economies will push demand up to almost 1.3 billion tonnes, a rise of 6.7 percent over last year, the International Iron and Steel Institute (IISI) said in its latest forecast.
Growth next year is likely to rise by about 6.3 percent, according to the institute, which represents 180 steel makers across the world.
Ku-Taek Lee, the IISI chairman, said: “The underlying assumption behind this forecast is that, although some weakening in the US and EU economies is expected, demand for steel will remain healthy thanks in part to the emerging markets, which will maintain their dynamism.”
The buoyant outlook from the IISI contrasted with a more sombre approach from investors in the Far East. Shares in several of the region’s steel makers fell on Monday after Posco of South Korea, the world’s fourth largest producer, said it was not planning to raise prices unless raw material costs soared.
The institute said it expected demand from the Bric countries to rise by just over 11 percent this year, and by 10.3 percent next year, but rising demand in other emerging economies would narrow the gap in growth rates between the Bric countries and the rest of the world.
Apparent steel use, which includes inventories, is expected to rise by 11.5 percent in China, taking its share of world steel consumption to 35 percent this year.
Luo Bingsheng, deputy chairman of China Iron & Steel Association, last week said that China’s crude steel output was estimated to reach up to 540 tonnes this year, an increase of about 50 tonnes on last year.
Luo also predicted that the domestic “apparent consumption” of crude steel was likely to grow about 11 percent, slightly lower than the 11.87 percent last year.
In the EU, steel use is expected to rise by 1.6 percent this year and 2.3 percent next year. Consumption in the North American Free Trade Agreement countries — the US, Canada and Mexico — fell sharply last year, but the IISI said it expected steel consumption to grow by 1.9 — this year and 1 — next year despite the economic uncertainties.
The world steel industry has boomed in recent years on the back of growing demand from industrializing nations. It is the second biggest industry, after oil, in terms of commodities.
The boom has driven up the price of steel, and the prices of iron ore and nickel, used in the manufacture of stainless steel, have also increased.
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