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Steel demand growth will decelerate to 5.3 percent next year, following an upwardly revised 13.2 percent demand expansion, according to The World Steel Association (WSA).
Steel use contracted by 6.6 percent in 2009.
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"Our first [outlook] forecast after the economic crisis in 2009 suggested 8.4 percent growth in steel demand in 2010,' said Daniel Novegil, chairman of the WSA Economics Committee
“We have now revised this figure up to 13.1 percent. This improved outlook is due to a better-than-expected forecast for the developed economies particularly the EU, NAFTA, and the CIS as well as the continued strong rebound in most emerging economies. This suggests a steady and stable steel recovery, and our current forecast does not foresee a double dip recession as feared by some."
Despite the better than expected forecast for 2010, WSA remains cautious.
“Steel demand in the developed economies in 2011 will still be well below the pre-crisis peak level,” Novegil noted.
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“The recovery so far has been mainly driven by the inventory cycle and government stimulus packages whose effects are now fading out. But, whether consumer and corporate spending will now pick up and continue the recovery momentum is yet to be seen. Recent economic indicators are giving us mixed signals and developments in the remaining part of this year and early next year must be watched carefully."
China's steel use in 2010 is expected to increase by 6.7 percent, WSA stated, after an increase of 24.8 percent in 2009.
While China showed an increase of 9.2 percent in apparent steel use during January-August 2010, WSA cautions that China's steel use growth will slow down considerably in the remaining part of this year due to the Chinese government's effort to cool down the real estate sector and ongoing production control. In 2011, China's steel demand growth rate will further slow to 3.5 percent with a weak real estate sector and the phasing out of stimulus packages.
Still, China's steel use in 2011 will be 42 percent above 2007 level. Moreover, China will account for about 45 percent of world apparent steel use in 2011.
WSA also noted that India's steel demand grew 7.5 percent during the crisis and is expected to grow by 8.2 percent and 13.6 percent in 2010 and 2011, respectively.
In addition, next year India will become the third largest steel-using country in the world after China and the US. India's steel use will be 32 percent above its 2007 level.
The US had a 36.2 percent reduction in apparent steel use in 2009.
WSA explained that aided by stock-building activities and a recovery in manufacturing, apparent steel use in the US is expected to grow by 32.9 percent in 2010 and then 9.4 percent to 2011, bringing it back to 79.7 percent of the 2007 level.
In Central and South America, apparent steel use recorded a 23.6 percent decline in 2009, but WSA noted that the region's steel demand “is coming back strongly thanks to recovering commodity prices, exports and renewed capital inflows.”
