Alacero: worldsteel expects “another inflection point” in global steel markets

Thursday, 27 October 2016 23:22:58 (GMT+3)   |   Sao Paulo
       

The World Steel Association (worldsteel) expects “another” inflection point in global steel markets, a top executive told participants of the Alacero conference, held in Rio, Brazil, from October 25-26.
 
“In terms of steel trading, we might be ahead of a period of slow growth. We need to start thinking the steel market. It won’t happen overnight, but this is a trend that is established and will continue,” said Edwin Basson, director general at worldsteel.
 
According to Basson, the Compound Annual Growth Rate (CAGR) that shows the “evolution” of the steel demand within the 1950-2017 had similar phases.
 
From 1950 to 1975, for example, the overall global CAGR was 5 percent, but then, from 1976 to 2000, the CAGR diminished its pace staying at 1.1 percent.
 
Commenting a graph prepared by worldsteel that showed a similar situation for China, the US, the European Union and Japan, Basson said that steel demand was similar from time to time. At certain periods, it grew steadily, but then the growth diminished.
 
As for the 2014-2016 period, for example, CAGR was forecast at 0.3 percent, following a 3.7 percent CAGR from 2006 to 2015.
 
In his presentation, Basson also highlighted that global economic growth is still weak, considering that a “modest” recovery in developed economies continues, while at the same time emerging markets “struggle” to grasp momentum. Additionally, global trade remains “anemic” hitting growth in the developing world. Overall, the global economic outlook continues to be revised down.
 
The worldsteel executive predicted the world’s global steel demand for finished steel to grow at an anemic rate of 0.5 percent in 2017 to 1.50 billion mt and 0.2 percent in 2016 to 1.50 billion mt.
 
Commenting on a different slide, Basson noticed some “heterogeneous net imports patterns,” citing the cases of the US, Russia and Brazil.
 
He also noticed that some “newcomers” are “determined” to join the net exporters markets. Net exports include China, Japan and Mexico.
 
As for Mexico, Basson wondered whether the nation could become an automotive and domestic appliances hub for Latin America and the NAFTA region.

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