IREPAS chairman: Main headache of long steel market is overcapacity
The SteelOrbis 2015 Spring Conference & 72nd IREPAS Meeting started in Paris today, March 23, with the participation of over 300 executives, including 100 representatives from 44 steel producer companies and 40 representatives from the raw material side.
In his welcome address, IREPAS chairman Kim Marti from Spanish steel producer Celsa said that the US economy still remains a bright spot with the labor market showing a good performance with a 5.5 percent unemployment rate, which in turn boosts consumer confidence and consumer demand. He added that, while Brazil is experiencing an economic slowdown, Chile, Colombia and Mexico continue to perform very well, remarking that, as a whole, the performance of the Americas is healthy.
Mr. Marti stated that the EU economy will grow by 1.0-1.5 percent in 2015 and this improvement is supported by the low value of the euro which allows EU-based companies to be more competitive and generate more business. The IREPAS chairman stated that, regarding Asia, China’s economy is expected to grow by seven percent thanks to measures implemented by the Chinese authorities, namely, the stimulus plan for infrastructure including construction of 2,800 airports under the 2016-2020 plan. He said that global picture in terms of the economy indicates opportunities.
Regarding long products, Mr. Marti pointed out that “the main headache” in the long product market is overcapacity, a big part of which comes from China. He went on to say that, amid a new level of sensibility arising regarding pollution, Chinese officials will force less efficient steel mills to shut down, though nobody knows exactly how and when.
Kim Marti also underlined the fact that some steel capacity in the EU will have to be shut down given the low domestic demand in the EU and Turkey.