WORLD STEEL OUTPUT TO REACH 1.6 BILLION TONNES BY 2011

We estimate global crude steel output in 2007 at 1350 million tonnes. Further growth is anticipated – rising to 1600 million tonnes in 2011. This represents an increase of more than 350 million tonnes over the period from 2006. In the previous five years, the volume of production expanded by almost 400 million tonnes.

Most of the increase in iron and steel production over the next five years will take place in the developing/emerging nations of Asia. We estimate that around 71 percent of global growth in steelmaking to 2011 will occur in these countries. In contrast, we predict that steel producers in the industrialised world will contribute less than 7 percent of the higher output over the period.

Of the 350 million tonne increase between 2006 and 2011, China is forecast to supply almost 210 million tonnes. Other significant contributors will be the former USSR with 33 million tonnes, Asia (excluding China and Japan) is likely to lift output by more than 30 million tonnes. Africa/Middle East are expected to supply 15 million tonnes each. These may appear to be modest tonnages but in percentage terms they are quite significant.

Rapidly rising commodity prices (particularly oil, coal and industrial metals – including iron ore) have changed the economic climate in recent years. Oil revenues have led to significant building activity in the Middle East. Reserves of energy and steelmaking raw materials in the former USSR have improved economic activity in that region. A similar picture has been recorded in India and Brazil. The availability of competitively priced energy and steelmaking raw materials will be a major factor in the location of steel manufacturing in the coming years.

In the longer term, when blastfurnaces and converters in the industrialised nations reach the end of their useful life, a number of them will not be rebuilt. Supplies of semi finished products are likely to be made at parent companies or subsidiaries in the low cost manufacturing countries of the world.

Source: Global Iron & Steel Production to 2011  - A new report from MEPS (International) Ltd.