During his speech at the SteelOrbis 2017 Spring Conference & 76th IREPAS Meeting held in Budapest on March 26-28, Jose Angel Rey, the international sales director of Spanish steel producer Celsa, said that, when global GDP growth surpasses three percent, this means healthy growth for steel demand and it is expected to happen in the coming years.
Mr. Rey pointed out that world steel demand is expected to grow by 0.5 percent in 2017 to reach 1.51 billion mt, following 0.2 percent growth in 2016. On the other hand, exports from China have been slowing down since May 2016, with the average monthly export volume from the country falling to 7.42 million mt in January 2017, compared to 11.25 million mt in September 2015.
The CELSA official said that global long products consumption decreased slightly in 2016 to 794 million mt, after peaking at 836 million mt in 2014. Despite this, the current consumption figure is 38 percent higher than the pre-crisis levels in 2007-08, with sections being the only product recording consumption growth in 2016, while rebar accounted for 45 percent of global long products consumption in the given year. The Asian markets account for more than 65 percent of total long products consumption, with China accounting for about 55 percent.
According to the figures provided by CELSA, rebar consumption in 2016 decreased by two percent year on year, Asian countries have driven the negative growth in global rebar consumption in 2015 and 2016 after years of being the engine of exponential growth. Mr. Rey suggested that having a reasonably balanced regional supply and demand should remain a priority for reinforcing bar producers.
Regarding the outlook for 2017, Mr. Rey stated that rebar consumption is expected to recover, with robust perspectives for the US, apparent consolidation of recovery in the European Union, with the help of a weaker euro and reasonable oil prices, despite the significant gap with pre-crisis consumption levels. GDP growth in all parts of the world can compensate for the stagnation in China’s rebar consumption. He concluded that today´s price gap between iron ore and scrap is to the benefit of EAF-based steel producers.