The opening session at the SteelOrbis Fall '11 Conference and 65th IREPAS Meeting featured the presentation of Kim Marti Subirana of CELSA, who said demand for long steel products is improving, more consistently in developing countries, adding that scrap prices show higher lows in a persistent uptrend, indicating that cost pressures will surely dictate an upward price direction in the long term.
Assessing the world economy, Mr. Marti remarked that the IMF revised its world growth forecast downward last week and that global activity has weakened and has become even more unbalanced, while market confidence has fallen sharply recently and downside risks are growing.
According to Mr. Marti, in advanced economies the outlook is for a continuous but weak and bumpy expansion and the handover from public to private demand in the US has stalled and the euro area has encountered major financial turbulence. The strength of the German economy acting as the European engine has weakened. In the meantime, prospects for emerging market economies have become more uncertain, although growth is expected to remain fairly robust and at a solid pace of about six percent in 2012. Regarding economic growth based on GDP evolution and forecasts, the future looks reasonable in figures, but more exciting for emerging and developing economies.
Mr. Marti underlined that, to avoid risks, two rebalancing acts need to be accomplished: first, private demand must take over from public demand. On this front, many economies have made progress, but major advanced economies are lagging behind; second, economies with a large external surplus must rely increasingly on domestic demand, whereas those with large deficits must do the opposite.
According to Mr. Marti, construction remains depressed in the European Union and NAFTA, and it remains at a high level in South America and maintains a strong momentum in China, India and ASEAN countries.
In his presentation, Mr. Marti indicated that global finished steel consumption is expected to grow by 5.9 percent this year, following an increase of 15.02 percent in 2010. Marti also pointed out that the share of global long steel consumption in total global finished steel consumption increased from 42.8 percent in 2000 to 50.9 percent in 2010.
In the meantime, global long steel consumption reached 648 million mt in 2010, up from 581 million mt in 2009, while the share of rebar consumption in total consumption reached 41 percent last year, said Mr. Marti, adding that rebar consumption is moving to emerging and developing economies.