Steelmakers Forecast Sees 2009 Demand Falling -8.6%

Oct. 13, 2009
Without China, global steel consumption would be down -24.4%

From its annual meeting, the trade association representing the world’s leading steelmakers has issues a near-term steel demand forecast, anticipating that 2009 global steel consumption will fall by -8.6% to 1.1 billion metric tons. It would be the second consecutive year of decline for steel products, according to the World Steel Assn. In 2008, global demand fell by -1.4%.

WorldSteel noted that the new forecast is an improvement of its interim outlook issued in April. That study projected 2009 steel demand would decrease by -14.1%.

Now, the WorldSteel forecasters conclude that global steel demand is recovering and will continue to grow through 2010, to achieve a 9.2% increase to 1,206 million metric tons. That would return the total to its 2008 level.

Daniel Novegil, the chairman of the WorldSteel Economics Committee stated: "The global recovery is stronger than we predicted in April. According to our current forecast, China will rebound 19% in 2009 and 5% in 2010. Emerging economies will slow down 17% in 2009, to grow 12% in 2010. Apparent steel use in developed economies, that contracted 34% in 2009, will rebound 15% in 2010.

“Therefore,” Novegil continued, “WorldSteel forecasts that global steel demand will return to growth in 2010, but this is expected to be moderate. As before the financial crisis, the emerging economies, especially China, will be the critical factor in driving world steel demand in the near future.

Chinese steel demand has been markedly consistent throughout the global decline. As it has done each year for the past decade, China’s steel consumption is expected to rise again for 2009, by 18.8% to 526 million metric tons. The association concludes that China will account for 47.7% of global steel consumption. Without China, it added, world steel demand would have fallen by -24.4%.

Indian steel consumption is forecast to grow by 8.9% in 2009 and 12.1% in 2010, according to the report.

However, in the NAFTA region the study anticipates that 2009 steel demand will fall -35.8%. From that level, it foresees a 17.1% increase in 2010 demand.

Specifically, U.S. steel demand is seen declining by -38.7% to 60 million metric tons in 2009. It dropped -8.2% in 2008. The 2010 forecast sees an 18.8% rebound to 72 million metric tons in 2010.

Similarly, the EU-27 nations are expected to show a -32.6% decline in steel consumption for 2009, to 122 million metric tons. The 2010 forecast sees that demand increasing by 12.4% in the EU-27.

WorldSteel notes that both the NAFTA and EU-27 regions would be reverting to 1991 demand levels if the 2010 forecast is accurate.

In Japan, steel consumption in 2009 will show a -31.3% decline, but is expected to recover by 15.8% to a total of 61 million metric tons in 2010.

Concluding, Novegil said: “While the state of the global economy has improved, uncertainties and concerns regarding the resilience of the recovery still remain with the possibility of any premature reduction in government stimulus actions. This uncertainty particularly exists for the Chinese economy in 2010, whose fast recovery in 2009 was largely enabled by such strong government stimulus policies.”

Latest from News

Artinun Prekmoung | Dreamstime
Dmitry Kalinovsky | Dreamstime
Dimarik16 | Dreamstime