Oct. 16, 2013
WSA Forecasts 3.3% Global Steel Growth in 2014
In its latest Short Range Outlook, the Brussels-based World Steel Association forecasts that global apparent steel use will increase by 3.1 percent to 1.475 billion tons this year. In 2014, the organization expects steel demand to grow by an additional 3.3 percent to 1.523 billion tons.
“The key risks in the global economy—the eurozone crisis and a hard landing for the Chinese economy—have continued to stabilize through the past six months. Our underlying assumption remains that the U.S. will resolve its fiscal constraint soon. The correction in the eurozone has been more severe than we forecasted, but the improvement seen recently is now expected to continue for the rest of 2013,” says Hans Jürgen Kerkhoff of WSA’s economic committee.
"In 2014, we expect to see continued recovery in global steel demand with the developed economies overall returning to positive growth. At the same time, we expect slower growth in China. With risks within the developed world receding, there is some uncertainty emerging from developing countries due to unresolved structural issues, political instability and volatile financial markets. All in all, despite economic conditions for the global steel industry remaining uncertain and challenging, we are forecasting further growth for steel demand in 2014,” Kerkhoff says.
In the U.S., after growth of 7.8 percent in 2012 due to generally strong steel demand, apparent steel use in 2013 is forecast to grow by just 0.7 percent to 96.9 million tons this year. In 2014, steel demand is expected to increase by 3.0 percent, aided by the improving global economy and activities in the automotive, energy and residential construction sectors. For NAFTA as a whole, apparent steel use will grow by 0.2 percent in 2013 and 3.2 percent in 2014, WSA estimates.
Following a 2.9 percent increase in 2012, apparent steel use in China is expected to grow by 6.0 percent in 2013 to 699.7 million tons, reflecting the impact of the government’s stimulus measures focused on infrastructure. However, steel demand in 2014 is expected to slow to 3.0 percent growth as the Chinese government’s efforts to rebalance the economy restrain investment activities.
The economic situation in Japan has improved in 2013 due to government stimulus measures. WSA has upped its forecast for steel demand to 64 million tons or 0.1 percent growth. The outlook for 2014 is less positive, however, due to the possible effects of a new consumption tax, manufacturing production relocation from Japan and rapidly escalating energy prices. Steel demand in Japan is expected to contract by 1.6 percent next year.
In Europe, the contraction in steel-using sectors continued in 2013, particularly during the first half of the year. Apparent steel use is expected to decline by 3.8 percent to 134.9 million tons after falling by 9.5 percent in 2012. Signs of stabilization in real steel use in the second half of 2013 bode well for recovery prospects in 2014. However, the pickup in the EU27 is expected to remain weak with steel demand increasing by only 2.1 percent to 137.8 million tons, WSA reports.