Commodities | Dec 07 2007
By Chris Shaw
Steel industry consultant MEPS has assessed the outlook for global steel production in coming years and its conclusion is world steel output should continue to show solid growth in coming years.
The group expects world output of steel this year will come in at around 1,350 million tonnes, rising to as much as 1,600 million tonnes by 2011. This would represent an increase from 2006 production levels of 350 million tonnes, which compares to a 400 million tonne increase in the previous five year period.
It will be Asia leading the way in terms of additional production, MEPS expecting by 2011 China will be contributing 210 million tonnes of the 350 million tonne increase, while Asian production should account for just over 70% of the overall increase in output in coming years.
Eastern Europe is forecast to lift production by around 33 million tonnes over the same period, while Asia ex-China and Japan should add around 30 million tonnes on the group’s estimates.
European Union output is tipped to expand by about 28 million tonnes, while North American and Oceania output is expected to show only minor growth in coming years. In contrast, the group expects South American output to jump from current levels of around 45 million tonnes to a little over 61 million tonnes by 2011.
In terms of pricing in stainless steel markets the group’s latest update shows signs of some upward pressure in the EU and US markets given new buying orders and the likelihood this continues into the early months of 2008.
Asian markets appear less positive given higher inventories and lower demand, but cuts to output should see prices remain relatively stable in the region in the group’s view.