Product category:
Engineering Industry Reports and Surveys
News Release from: MEPS (International)
Edited by the Engineeringtalk Editorial
Team on 28 April 2004
World steel production set to top a
billion tonnes
The global steel scene has changed dramatically since the beginning of this year, according to the latest report from MEPS (International).
The global steel scene has changed dramatically since the beginning of this year A degree of panic buying has developed in most parts of the world
This article was originally published on Engineeringtalk on 4 Nov 2005 at 8.00am (UK)
Related stories
Stainless crude steel production trends analysed
Global stainless crude steel production is expected to reach 25 million tonnes this year and forecast at 26 million tonnes in 2006, according to MEPS (International).
Global steel industry analysed
The global steel industry has been subject to a number of significant changes since the start of the millennium. This article looks are market trends.
Shortages are now being reported as the mills attempt to meet their increasing order books.
This has created a scramble for raw materials and deficits are reported for all the major inputs for steel making, including scrap, iron ore and coke.
Steel prices are climbing rapidly, as a result, and adding to the over-ordering of most products.
Moreover, shipping costs are increasing as vessels are tied up in many Asian ports awaiting discharge.
This is an unprecedented situation.
Further reading
After Arcelor/Mittal more consolidation inevitable
Consolidation in the global steel industry has accelerated in recent years.The tussle between Mittal Steel and Arcelor that has been going on since January appears to be nearing its endgame
Chinese stainless steel is creating trade tensions
Korea's Posco inaugurated its new stainless steel melting shop in China last month - an addition that consolidates China's recently won position as the world's largest stainless steel producing nation
EU steel prices slip as import threat intensifies
Steel prices in the main West European markets have started to look a little weaker
MEPS expects world steel production to increase by more than 20 million tonnes in the first quarter of 2004, compared with the same period in the previous year.
Raw material shortages are likely to reduce this rate of growth over the rest of the year.
The company's estimate for global steel making in 2004 is now 1.01 billion tonnes.
This equates to an increase over the last twelve-month period of 48 million tonnes (5.0%).
Blast furnace iron making is forecast to rise to 692 million tonnes this year - up 36.5 million tonnes on 2003 or 5.5%.
EU steel production is forecast at 164 million tonnes this year.
This represents an increase of 3.7 million tonnes in the first half.
MEPS expects shortages of raw materials to impact on output in the final six months.
Real demand in the EU will be at a lower percentage growth rate than output.
However, domestic supplies will meet some of the expected reduction in import volumes.
Steel production is forecast to expand by more than 5% in other Western Europe in 2004.
An improvement in Turkish output is the main reason for the strong result.
These mills are exporting considerable quantities of long products to nearby European and Middle Eastern countries.
MEPS expects the rapid advance in the early months to decline somewhat as raw material supplies tighten even further later in the year.
Modest recovery in the remaining countries in Europe is also likely to peter out in the second half.
Many of the nations in Central/Eastern Europe will be joining the European Union in May 2004.
In MEPS' next issue, these will be included in the EU figures.
The main countries are the Czech and Slovak Republics, Hungary and Poland together with a number currently incorporated in "other Western Europe".
The extra EU tonnage in 2004 will amount to in excess of 23 million tonnes.
The two steel making countries remaining in this category are expected to show an output rise this year.
The mills in Romania started off quite strongly and should produce around 6.3 million tonnes in 2004 - the best performance since 1998.
Bulgarian supply should be stable.
Steel making in the former USSR went up by 5% in 2003.
A slightly smaller but significant rise of approximately 4.7% is expected in 2004.
Demand from the home and overseas markets is strong.
Furthermore, the availability of raw materials is more stable than in many other parts of the world.
We believe steel production this year will reach 110.75 million tonnes.
MEPS can envisage production in the NAFTA region increasing by approximately 1 million tonnes in 2004 compared with the year earlier figure.
A modest pickup is anticipated after a slow start in the early months.
Customer demand is very strong but output is restricted due to a shortage of raw materials for the blast furnaces and sky-high prices for scrap and other metallics for electric melting.
Steel output in South America will expand substantially this year.
MEPS is expecting an upturn of 3 million tonnes compared with 2003.
Raw materials are available for the manufacturing processes.
Most of the expansion in supply will be scheduled for export markets, suffering from shortages.
African steel production in 2004 is expected to be marginally up on the figure in the previous twelve months.
Demand in the main producing countries is quite firm but output in many northern states is slipping.
Crude steel output is forecast to move up by 0.5 million tonnes in the Middle East this year, compared with 2003.
Iranian steel making continues to grow based almost entirely on rises in domestic demand.
Saudi Arabian consumption is also increasing.
Local mills are responding by lifting output from investment in new capacity.
Steel production in Asia is predicted to climb to almost 472 million tonnes in 2004.
This equates to a hike of more than 32 million tonnes on the previous year's outturn.
The proportion of global output is now 47% and could reach 50% before the end of the decade.
The expansion is led by Chinese steel makers.
MEPS envisages output in this country jumping to over 246 million tonnes this year - up 26.3 million tonnes (12%) on the result in 2003.
Almost half the increase will occur in the first quarter of the year.
A more modest rise is expected in the final nine months.
The main driver for this rapid output advance is the exceptional rise in construction for housing and factories as export sales of manufactured goods continue their upward path.
Japanese steel output is forecast to be higher this year.
The increase is expected to be just 1%.
Most of the growth will occur during the first half.
Raw material shortages could be a feature of the last six months.
Export sales could be reduced a little.
A modest increase in output is predicted for the steel plants in Australia and New Zealand this year.
• MEPS (International): contact details and other news
• Email this article to a colleague
• Register for the free Engineeringtalk email newsletter
• Engineeringtalk Home Page
Search the Pro-Talk network of sites
