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World steel output continues to rise

A MEPS (International) product story
Edited by the Engineeringtalk editorial team Aug 17, 2006

The latest forecast by MEPS (International) for global output of steel in 2006 is 1215 million tonnes.

The latest forecast by MEPS (International) for global output of steel in 2006 is 1215 million tonnes.

This represents an increase of 7.5% over the outturn in the previous 12 months and will be the fifth consecutive year that world steel production has exceeded 5%.

A number of factors are at work driving such rapid growth.

First, strong real demand continues in many important developing/emerging countries.

Inventory rebuilding has also occurred in several industrialised nations after the production cuts in 2005.

Finally, rising raw material input costs have prompted customers to order in advance of steel price hikes - creating an exaggerated market for steel products.

MEPS expects 2007 to show further advances in supply.

But the rate of growth is likely to moderate from the levels of recent years.

A period of inventory drawdown is expected in many of the industrialised nations.

Asia remains the fastest growing region for steel production.

Its share of total output will be close to 53.5% in 2006.

This compares with a figure of 39.2% in the first year of this millennium.

Steel output in the European Union continues to pick up at a rapid pace as buyers place orders in advance of impending price rises.

MEPS now expects steel production to reach 193.5 million tonnes - an increase of approximately 3.8%.

Real demand is growing but at a lower rate than supply by the domestic mills.

Blast-furnace iron production will expand this year by 3.4%.

The growth in construction activity has provided the background for electric steel makers taking a greater share of the market.

Crude steel output in Western Europe (excluding the EU) is predicted to expand by approximately 10% in 2006 compared with the previous 12 month period.

New capacity installed in Turkey is now nearing full output - leading to a 2 million tonne rise this year.

Substantial growth is also expectd in Romania, Serbia and Montenegro after privatisation.

MEPS now predicts steel making in the former USSR at 117.5 million tonnes this year.

This represents a rise of 4.8 million tonnes (4.2%), over the 2005 outturn.

Virtually all the increase will take place from the blast-furnace/oxygen steelmaking route.

There are, however, plans to install more electric melting in the future.

North American steel production is now forecast to reach 132.5 million tonnes in 2006 - up 5.6 million tonnes (4.4%) on the year earlier outturn.

Blast-furnace iron making is predicted to expand by 4.8 million tonnes this year after relines at several major plants.

Virtually all the gain will be from mills using the integrated blast-furnace/oxygen steel making route.

South American steel output in 2006 is unlikely to top the figure recorded in the previous twelve months.

A major breakdown at a blast furnace in Brazil has created this unusual situation.

Electric steel making has increased to make up some of the shortfall.

African steel output in 2006 is forecast to be marginally down on the year earlier figure by a few%age points.

Most of the decline can be attributed to planned output cuts.

Steel production in the Middle East will be close to 16 million tonnes in 2006.

Strong demand across the whole region is providing the background for the installation of steel manufacturing facilities.

Total output is expected to rise 4% this year compared with last.

MEPS expects Asian crude steel production to climb to 649 million tonnes in 2006.

This equates to a rise of almost 11% in the 12 month period.

Blast-furnace iron production is the dominant process and is forecast to expand by almost 14% this year.

Asian iron and steel manufacturing equates to 63 and 53.5% of global output, respectively.

China dominates steel output growth in the region.

MEPS expects steel production rising by 16.5% to reach 407.5 million tonnes this year.

Blast-furnace iron output is expected to climb to 396 million tonnes - a gain of almost 20%.

Much of the improvement took place in the first trimester.

Exports have increased but the majority of the extra steel manufacturing is for domestic consumption.

MEPS expects production of steel in Oceania to be slightly down in 2006 compared with the previous 12 months.

This is due to blast-furnace relines planned for this year.

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