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5-4-2011 News
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World Steel Demand to Hit New Record in 2012

The Brussels-based World Steel Association forecasts that apparent steel use will increase by 5.9 percent to nearly 1.36 billion metric tons in 2011, following 13.2 percent growth in 2010. In 2012, it forecasts that world steel demand will grow a further 6.0 percent to reach a new record of 1.44 billion tons.

This forecast suggests that by 2012, steel use in the developed world will still be 14 percent below the 2007 level, whereas in the emerging and developing economies it will be 38 percent above. In 2012, the emerging and developing economies will account for 72 percent of world steel demand, in contrast to 61 percent in 2007.

"2010 saw a steady recovery of steel demand, which began in the second half of 2009, driven by stimulus packages globally, the resilience of emerging economies and an overall market recovery. In 2011, we expect to see a further 5.9 percent growth in world steel demand," said Daniel Novegil, chairman of the association's economics committee. "Our forecast is based on a stable and steady recovery of the world economy. There are uncertainties, however, deriving from financial fragilities in Europe, unrest in some oil-producing countries in the Middle East and the earthquake in Japan, which could have a negative impact on the recovery and thereby affect steel demand."

China's apparent steel use in 2011 is expected to increase by 5.0 percent to 605 million tons, following 5.1 percent growth in 2010. Given the pace of steel production in the first quarter of 2011, Chinese apparent steel use could be even higher. The Chinese government's efforts to cool down their overheating economy, particularly the real estate sector, is likely to affect Chinese steel demand later this year, however. In 2012, Chinese steel demand is expected to maintain 5.0 percent growth, which will bring China's apparent steel use to 635 million tons. 
 
India is expected to show solid growth in steel use in the coming years due to its strong domestic economy, massive infrastructure needs and expansion of industrial production. In 2011, India's steel use is forecast to grow by 13.3 percent to reach 68.7 million tons. In 2012, the growth rate is forecast to accelerate further to 14.3 percent.

WSA forecasts that the rebound in apparent steel use in the United States will continue this year, reflecting the second round of quantitative easing and other fiscal policy initiatives, growing 13.0 percent to 90.5 million tons. While activity in the industrial and energy markets is on the upswing, construction markets remain at depressed levels. In 2012, U.S. steel use is expected to grow by 6.9 percent to 96.7 million tons, bringing it back to 90 percent of the 2007 level. For NAFTA as a whole, apparent steel use is forecast to grow by 10.9 percent in 2011 and 6.3 percent in 2012.

Apparent steel use in the EU is forecast to grow by 4.9 percent to 151.8 million tons in 2011 on the back of an export-driven industrial rebound. The largest eurozone economies such as Germany and France are forecast to enjoy solid recovery in steel use mainly in the automotive and machine building sectors. Other economies (i.e., Greece, Ireland, Portugal and Spain) are projected to show slow growth in steel use, particularly as a result of weak construction activity. In 2012, the region will see an increase of 3.7 percent to 157.5 million tons in its apparent steel use, bringing it back to 80 percent of the 2007 peak.

Japan's steel use was expected to decline by 1.2 percent to 63 million tons in 2011 as stimulus measures expire. However, the forecast was prepared before the natural disaster and it is too early to fully grasp the implications of these recent tragic events, said worldsteel officials.

  
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