Turkish integrated steelmaker Erdemir sees a positive outlook for the steel industry in 2014, as stated by the company's marketing and sales coordinator Başak Turgut at the 8th SteelOrbis Turkish Steel Market Conference held in Istanbul on November 29.
According to Mrs. Turgut, the global economy is expected to grow faster in 2014 at a rate of 3.6 percent, compared to foreseen growth of 2.9 percent for the current year. The US economy has been performing well, with its industry reviving thanks to new energy (shale gas and oil) investments and cheaper energy prices a result, while the European economy has started to show signs of recovery. On the other hand, the growth in the Chinese economy is being kept under control and it is expected to cool down slightly to 7.3 percent in 2014, compared to an estimated 7.6 percent growth this year. Besides, steel inventories in China are low, said Mrs. Turgut, who added that a flood of exports out of China due to oversupply is unlikely, at least given the current situation when the government's plan to shut down 100 million mt of capacity is taken into account. Moreover, the growth in world steel consumption is higher than the historical average, said the Erdemir executive, enumerating her reasons for a more optimistic outlook.
Regarding raw material prices, she said that actual prices for coking coal and iron ore in 2013 have remained well above expectations and added that, despite expectations of oversupply for iron ore in the years to come, iron ore prices may remain at higher levels if China prefers to import iron ore instead of using low grade domestic material with higher production costs. Scrap prices, on the hand, have remained high in 2013 despite lower consumption in Turkey and China, due to higher domestic demand in the US based on better industrial performance.