world steel industry
DESCRIPTION
world steel industry review including estimate of 2008 global steel demand (by region, by end-use, by form, by product), 2009 demand forecast, outline of selected producer strategies, list of industry issuesTRANSCRIPT
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World Steel Industry
June 2009
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WORLD STEEL INDUSTRYAGENDA
• Global steel demand– By region– By end-use– By form– By product
• Demand forecast• Steel supply• Industry issues• Opportunities …
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GLOBAL STEEL DEMANDDemand by Region†
World Region Demand, mt
EU (27) 182
Other Europe 29
CIS 50
NAFTA 130
C & S America 43
Middle East / Africa 68
Asia & Oceania 693
World 1195
Figures are 2008 estimates in millions of metric tonnes of finished steel products. Assessments cover all steels and thus include ~25 mt world consumption of stainless steel [20mt flat + 5mt long].
Note – all figures in this report are to be treated as indicative estimates supplied by Metals Consulting International Limited [‘MCI’] rather than as precise or definitive assessments. For further clarification or support please contact us by email [email protected].
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GLOBAL STEEL DEMANDDemand by End-Use
Figures are MCI estimates of 2008 world steel consumption, in millions metric tonnes.
End Use Demand, mt
Construction 575
Machinery 285
Transport 135
Appliances 55
Fabrication 40
Oil and gas 40
Shipbuilding 20
Other 45
Total 1195
Transport includes approx. 90m cars @ 950 kg/car [flat steel products 640kg/car + long products 190kg/car + yield loss and parts supply] thus ~85mt just for light passenger vehicles (heavy and light trucks, buses, rail wagons etc represent additional steel demand). Appliances (white goods) amount to ~400m units at roughly 120-140kg steel (including yield loss) per appliance unit.
Figures above include demand across other steel segments including consumption of engineering steel or special bar quality steel of ~46mt (SBQ), and fasteners demand at around ~21mt.
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GLOBAL STEEL DEMANDDemand by Form
Demand estimates above exclude certain products not in flat / long / tubular form that are made from semi-finished steel. These include steel wheels produced from ingots or continuous cast rounds (mostly for rail transport), for which world demand currently amounts to ~5 million units [3.5m forged wheels; 1.5m cast wheels]. At ~350kg/wheel this segment accounts for ~2mt steel demand.
Form Demand, mt
Flat 555
Long 520
Tube 120
Total 1195
Figures are MCI estimates for 2008 in millions metric tonnes finished steel products.
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GLOBAL STEEL DEMANDDemand by Product – Flat Products
Product Demand, mt
Plate 110
Hot rolled coil & sheet 196
Cold rolled steel 117
Coated flat products 132
Total 555
Figures are 2008 estimates, and include electrical steel (silicon steel) demand of ~11 mt and tin mill product demand of ~13mt.
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GLOBAL STEEL DEMANDDemand by Product – Long Products
Product Demand, mt
Heavy sections 44
Light sections 46
Bar 280
Rod 150
Total 520
Figures are 2008 estimates. Heavy / light section cut-off is 80mm. Demand assessments include ~160mt rebar [excluding bar-in-coil] within bar, and include demand for other downstream products (e.g. wire, wire rope) obtained by further processing. Heavy sections figures include rail demand of ~10 mt/year.
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GLOBAL STEEL DEMANDDemand by Product – Tubes
Product Demand, mt
Welded 83
Seamless 37
Total 120
Figures are 2008 estimates of world demand. Welded tube estimate includes large diameter pipe (LDP) consumption of approximately 18mt.
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DEMAND FORECASTWorld steel demand in 2009 and 2010
• 2008 world finished steel demand ~1195 mt• Level of full year 2009 consumption:
– Will be lower due to the credit crisis– Will be critically dependent on construction sector –
thus infrastructure spending e.g. in China– Is assessed by MCI at ~1060mt– This is an average of recent IISI / OECD forecasts
• Recovery expected in 2010• MCI tentative 2010 demand forecast is ~ 1175
mt – if China stimulus progresses as planned†
†: China’s fiscal stimulus package is a $585 billion increase in spending on transportation construction [roads, rail], earthquake reconstruction, rural infrastructure modernisation projects, environmental protection, housing, indigenous innovation [technological capabilities] and healthcare / education. Geared largely to steel intensive building and construction, MCI appraise this package as one of the most important factors shaping the future recovery of Chinese / world steel demand in 2009 and 2010.
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STEEL SUPPLYTop 5 producers / development options
Producer Output mt Business development path
ArcelorMittal 116Rationalisation of high cost inland sites [Chicago area, USA; France, Germany]
Nippon Steel 36 Consolidation of Japanese industry
JFE 34 Merger with Nippon Steel
POSCO 31Acquisition of the Vietnamese Steel Corporation; regional jv's with Asian partner(s)
Baosteel 29 Organic [especially export oriented] volume growth
Outputs are 2008 crude steel production figures [source: IISI]. Development paths are MCI’s own estimates of possible development paths. Please note that these development options have been elaborated by MCI without consultation with the steelmakers.
For more analysis similar to that above (with MCI’s compliments) visit us at: www.steelonthenet.com/swot.html
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INDUSTRY ISSUESSome current topics for discussion
Globalisation Q: How does ArcelorMittal get to 250 mt?
A: Emphasis on demand side not supply side – construction markets especially
CO2Q: How to respond to increasing environmental and emissions costs?
A: Increasing geographic polarisation between melting and rolling of steel
TechnologyQ: What will the next technology leap comprise?
A: More ‘near net shape’ casting including technology licensing e.g. of Castrip®
ChinaQ: What are the main problems or allegations?
A: Direct and indirect subsidies; capacity expansion during time of stagnant world steel demand; increasing international adoption of trade barriers as a result, to the detriment of the industry worldwide
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OPPORTUNITIES …
• Can MCI help your firm develop a presence in the international steel sector?
• Can we help you raise funds for investment?• Or assist you perhaps with a strategic appraisal of your
business?• If so please contact us for a no obligation discussion …
Please contact: Andrzej Kotas, Managing Director, MCI
Website: http://www.steelonthenet.com
Email: [email protected]
Mobile: +44 (0) 775 149 0885
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OPPORTUNITIES …
For more steel information visit us:
http://www.steelonthenet.com