Commodities | Nov 10 2006
By Chris Shaw
Steel industry consultant MEPS has just released its forecasts for global steel production this year, estimating world output will post its strongest increase in percentage terms year-on-year for more than three decades.
It estimates global crude steel production this year of 1,237m tonnes, up from 1,129m tonnes last year, with blast furnace iron production also expected to increase by more than 10% to 873m tonnes.
To put this into some sort of perspective, MEPS points out in the seven years since the end of the last century iron and steel production will have increased by almost 450m tonnes or 57%, an average rate of production growth of 6.6%. The good news for those in the industry is MEPS expects solid growth to continue in coming years.
Not surprisingly Asia has been the driver of the increase, the region lifting its share of global production from 39% in at the end of last decade to around 53% this year, the group forecasting this will increase to as much as 58% by 2010.
This has been driven of course by China, where output is forecast to increase to 417.5m tonnes this year from 349.3m tonnes last year. Japan and Other Asia are expected to post relatively minor production increases in contrast, Japan forecast to generate output of 114.5m tonnes against 112.5m tonnes last year and Other Asia 12.9m tonnes against 12.2m tonnes last year.
Looking at other regions, MEPS is forecasting EU steel production of 199m tonnes this year and blast furnace production of 111m tonnes, which would represent increases of 12.3m and 4.8m tonnes respectively from last year.
In North America it estimates total output will reach 134m tonnes, up from 127m tonnes last year, while it expects South America will record only a minor increase in output, this reflecting lost production from blast furnace breakdown in Brazil earlier in the year.
Oceania production should increase to 8.8m tonnes this year from 8.6m tonnes last year, MEPS putting this down to higher Australian output. Production in the Middle East is forecast to be flat at around 15.4m tonnes, while MEPS is expecting a slight decrease in African production to 17m tonnes from 17.9m tonnes last year.