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The International Iron and Steel Institute (IISI) forecasts 2007 will be another strong year for the steel industry with apparent steel use rising from 1,120.9 mmt in 2006 to 1,197.6 mmt in 2007, an increase of 6.8%. Latest projections for 2008 suggest a similar global growth rate to this year at 6.8%. These figures represent an upward percentage point revision of 0.9 for 2007 and 0.7 for 2008 over the March forecast.
The BRIC (Brazil, Russia, India and China) countries, which accounted for about 41% of global steel demand in 2006, will again be leading the growth with an expected increase of 12.8% for 2007 and 11.1% for 2008. Overall, 77% of world growth in 2007 and 71% in 2008 will take place in BRIC.
China apparent steel use is expected to grow by 11.4% in 2007 and 11.5% in 2008, accounting for 35% of the world total. For India, forecasts for apparent steel use point to an increase of 13.7% in 2007 and 11.8% in 2008.
Very positive developments are forecast for the Russian market, where growth of 25% for 2007 and 9.5% for 2008 are led mainly by the energy and construction sectors. Apparent steel use in Brazil is expected to increase by 15.7% for 2007 and 5.1% for 2008, with strong fixed capital formation partly driven by public investment programmes.
In the EU (27), the growth in steel demand supported by healthy developments in Germany is mitigated by adjustments in the inventory positions, leading to a growth of 4% in 2007 and 1.4% in 2008.
For 2007, steel demand in the NAFTA region appears less robust than previously anticipated, particularly in the residential construction sector. A negative contribution to growth also derives from inventory reductions. In 2008, improved prospects for the overall market conditions lead to positive forecasts of 4% growth.
The IISI Executive Committee reviewed the forecasts at its meeting in Berlin and commenting John Surma Chairman IISI said “Although global economic risks have increased, the IISI forecast assumes that the recent credit market volatility will not move the US economy into recession. We are pleased to note that North Africa, South Africa and the Middle East are emerging as strong growth regions as higher energy and raw material prices associated with growth in China, as well as other developing nations, increase income and boost investments in these regions."
Notes to Editors:
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, however, may differ from the amount of steel actually being used with the difference being added to, or drawn from inventories.
Source: International Iron and Steel Institute
http://www.worldsteel.org
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