Global steel output set to top a gigatonne

It is highly likely that outturn for steel production across the world in 2004 will be one billion tonnes, according to a new review from MEPS (International).

The economies of the industrialised nations are showing signs of a modest upturn.

Confidence is growing about the global picture in 2004.

It is highly likely that outturn for steel production across the world in 2004 will be one billion tonnes.

MEPS estimates global output of steel in 2003 at almost 960 million tonnes.

This represents an increase of near to 6.5%.

Production via the blast-furnace route is the most popular process: with iron-making up 7% on the 2003 figure at over 650 million tonnes.

Electric melting, using units from direct reduction of iron, is also becoming more fashionable after the substantial rise in the cost of scrap around the globe.

MEPS' prediction for DRI output in 2003 is 46 million tonnes - up by more than 3 million tonnes year on year.

The estimate for EU steel output in 2003 is 159.9 million tonnes - up by almost 1% on the year earlier figure.

The potential threat from imports did not materialise as Far East demand remained firm.

MEPS' forecast for regional steelmaking in 2004 is 161 million tonnes.

This is a modest rise over the expected outturn in 2003.

Domestic demand should improve a little.

However, the strength of the Euro against the US dollar could lead to a significant increase in imports and a reduction of exports - thus cancelling some of the benefits of improved home consumption.

MEPS expects output in other Western Europe for 2003 to be almost 9% higher than the year earlier total.

The gain is largely the result of a substantial rise in Turkey.

Domestic demand is increasing and export sales have been booming.

Further improvement is expected in 2004.

MEPS forecasts a further expansion of steel-making to reach 22.5 million tonnes (5.6%).

The main contributor will be the Turkish steel sector from better home consumption and higher exports.

MEPS' prediction for steel output in 2003 in Central/Eastern Europe is just below 30 million tonnes.

A modest improvement is expected, yet again, in 2004 at 30.5 million tonnes.

The benefit is likely to be shared equally between the blast furnace mills and the electric melters.

MEPS predicts that Polish steel production will pick up in the coming months now that the privatisation of PHS has been settled.

Further improvements should also accrue in the Czech and Slovak Republics after solid gains in 2003.

MEPS' estimates for iron and steel production in the former USSR in 2003 are 81.85 and 106.3 million tonnes, respectively.

These represent escalation over the previous year of more than 5%.

Further increases in steel-making are forecast for 2004 at 108 million tonnes.

Stronger domestic consumption and improved export performances were the drivers for the upturn in 2003 and are likely to continue in the same way through the following 12 months.

Steel production in North America in 2003 is now expected to be broadly similar to the year earlier figure.

Iron-making will be significantly lower at just above 51 million tonnes.

In recent months the blast-furnace mills have not been prepared to make up lost production from plant closures as they tried to restore a balance between steel supply and demand.

A modest improvement of 3% is forecast for 2004.

Local orders should pick up and import penetration is unlikely to increase.

MEPS' estimate for South America's crude steel production in 2003 is 43 million tonnes.

This represents an increase of 5% over the year 2002 value.

A further but more modest rise is expected for 2004.

The substantial improvement in 2003 was based mainly on higher exports to all parts of the world.

Home demand was basically flat.

In the following 12 months MEPS expects better consumption in local markets but significantly lower export volumes.

African output in 2003 will be near 16.2 million tonnes.

This equates to an increase of 0.5 million tonnes over the outturn in 2002.

Most of the improvement will come from higher production in South Africa.

Further gains are expected in 2004.

Egyptian steel-making should revive - based on expanding home demand.

South African domestic demand and export sales should rise marginally.

Libyan output could reach 1 million tonnes.

Steel output in the Middle East is expected to grow by around 10% in 2003 compared with the outturn the year before.

Substantial increases will be recorded for Iran and Saudi Arabia from new capacity recently installed and brought up towards optimum output.

Further improvement, to 14.5 million tonnes is forecast for 2004.

The positive trend is based on escalating domestic demand and strong investment in new plant and equipment.

Steel output exploded in Asia in 2003.

More solid growth is expected in the following 12 months.

MEPS' estimate for Chinese steel-making in 2003 is now almost 220 million tonnes.

The company believes 245 million tonnes is a distinct possibility in 2004 - given the rate of growth in domestic demand, improved productivity at existing steel plants and new capacity.

Japanese crude steel production should reach an all time high in 2003 at 110.5 million tonnes.

Record exports are expected to be reported.

Consumption of steel for cars and ships has been buoyant.

MEPS does not, however, forecast any improvement in steel output in 2004.

Steel-making in the rest of Asia should show an increase of 4 million tonnes in 2003 and a similar amount in the following 12 months.

Sales to China have boosted output in this subregion in recent months.

South Korean output will be up by almost one million tonnes in 2003.

The rise in the following 12 months may be slightly lower.

Indian steel-making is expected to show a 10% growth in 2003, year on year.

This may be reduced to nearer 6% in 2004 due to weaker export volumes.

Steady growth is also expected in Taiwan and the other major producing nations in Asia in 2004.

Modest gains are expected for steel-making in Oceania in 2003.

These should continue into the following year.

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