CRUDE STEEL PRODUCTION TO RISE 4.1 PERCENT IN 2006
MEPS - Global Crude Steel Production
Estimate ('000 tonnes)
MEPS - World Steel
MEPS estimate for world crude
steel output this year at 1176 million tonnes. This represents an
increase of 4.1 percent over the 2005 outturn. Blastfurnace iron
production is predicted to reach 827.5 million tonnes - 5.4 percent
up on the figure recorded in the previous twelve months. Only modest
gains are expected for direct reduced ironmaking.
The majority of the steel output
improvement will take place in China and India. In these countries
the blast furnace/oxygen steelmaking process is dominant.
Consequently, the rate of growth of blastfurnace iron making will
outpace steel manufacturing in the near term. The high cost of
energy is restricting the rise in direct reduction of iron in
We estimate that 85 percent of the increase
in global crude steel output will be supplied from the Asian
continent. In fact, Chinese mills will be responsible for almost 80
percent of the total, despite the anticipated slowdown in the rate
of growth in steelmaking in the country in 2006, compared to recent
Steel makers around the world are
exercising a degree of control in output in an effort to put a floor
under the price decreases witnessed in 2005 when customers embarked
on a period of inventory reduction after the excesses of 2004. In
many countries this action has stimulated prices and in a number of
cases has revived demand on the mills.
Steel output in the EU-25 member states is
picking up faster than we anticipated. The threat from Asian imports
has not materialised and is not likely to be significant in the next
few quarters. We have, therefore uprated our forecast production
this year to 188.5 million tonnes - 2 million tonnes up on the prior
twelve month period. Blast furnace iron making is also expected to
rise as the flat products’ market improves.
It should be noted that approximately half
of this years anticipated higher steel manufacturing is likely to
come from the new entrants from Eastern Europe. This is principally
due to improved economic performance and fewer maintenance outtages.
Crude steel production in Europe (excluding
EU and former USSR) is predicted to increase by 0.7 million tonnes
this year compared to 2005. This equates to a rise of 2.2 percent.
Improved output is likely in Turkey as new capacity is commissioned.
Steel output in the former USSR is forecast
to expand by 1.3 million tonnes in 2006 relative to the previous
year. Blastfurnace iron making is likely to improve by 0.75 million
North American crude steel output is
expected to increase by almost 2.5 million tonnes (2 percent) this
year in comparison to 2005. Most of the improvement is expected to
occur from the integrated producers. Blast furnace ironmaking is,
therefore, predicted to expand quite significantly.
Total steel making in South America is not
likely to increase in 2006. The main reason for this situation is a
major plant breakdown at CSN, the Brazilian integrated producer.
African steel manufacturing is forecast to
hold up in 2006 at a figure close to the outturn in the previous
twelve months. The year should start off well but a planned
blastfurnace outtage in the second half in South Africa should limit
any possible improvement.
Production of steel in the Middle East
should continue its inexorable rise through 2006. An increase of 5
percent is anticipated. The majority of the gain is likely to come
from steel manufacturers in Iran. Investment in new capacity
continues apace in this country.
We expect total Asian steel production to
increase by 40 million tonnes in 2006 compared to the year earlier
figure. Blastfurnace iron production is predicted to be 36 million
Blastfurnace relines and increased import
volumes are likely to restrict steel manufacturing in Oceania in
Source: MEPS - World
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