The report said that the cyclical trends seen in the world steel market are no longer being followed, which makes regressive analysis impossible. Boom conditions currently apply in terms of steel prices – based mainly on perceived raw material shortages. But, MEPS said “we do not expect the recent growth rates to continue in the medium term”.
In the three years between 2001 and 2004, MEPS estimated an apparent expansion of finished steel consumption from 766 to 918 million tonnes worldwide, representing an average annual increase of 6% in that period.
This rate of increasing consumption more than doubled the 2.5% average annual increase seen in the decade up to 2002. From 1970 to the year 2000 the average annual increase was just 1.2%. The 2004 figure for finished steel consumption – about 918 million tonnes – represented a 5.3% increase on 2003.
MEPS said it is forecasting further expansion in demand over the next few years, with apparent finished steel consumption “reaching 1 billion tonnes in 2008”, but that increases in consumption would be smaller than have been seen in the last few years. The report said predictions were for a 3% annual increase on average over the next five years.
The report said this “rather modest prediction” was based on two key factors. Firstly, because apparent growth in demand over the last few years has been “above the real demand” after talk of raw materials led to buyers carrying higher stocks than had previously been considered necessary. And secondly, because the Chinese government is keen to avoid overheating of its economy and has been making attempts to reduce growth in key industrial sectors including steel.
Steel consumption in Asia is expected to move upwards over the next five years, the MEPS report said, with demand across the continent stimulated by growth in China. Emerging and developing countries in the Far East are showing strong manufacturing activity, base on exports to industrialised nations.
More details on the MEPS steel report for September is available via the MEPS (International) Ltd website.
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