Kim Marti: Steel industry reaches end of major growth cycle

Monday, 11 April 2016 17:53:22 (GMT+3)   |   Istanbul
       

Speaking at the SteelOrbis 2016 Spring Conference & 74th IREPAS Meeting being held in Lisbon, Kim Marti, the international sales director of Spanish steel producer Celsa, said that in 2015 the steel industry reached the end of a major growth cycle which was based on the rapid economic development of China. He pointed out that we are at or have even passed the lowest part of the cycle. The time it will take to get back to a more reasonable business environment will depend exclusively on how quick restructuring actions are taken.
 
Mr. Marti indicated that the slowdown in demand in China has been remarkable, pushing down prices of steel and iron and prompting Chinese mills to target increased overseas sales, boosting trade tensions and causing the financial performance of many producers around the world to sink to unacceptable levels. He added that, seeing what was happening in China, global steel producers reduced output in 2015 to adapt to the new demand levels. The reduction in production resulted in a decrease in utilization rates, far below profitable levels which would be at 80 percent, according to Mr. Marti.
 
The Celsa official stated that the previous consistent growth in the global long product market came to a halt in 2015, mainly due to the sharp slowdown in the construction market in China, the economic downturn in oil producing countries, and geopolitical unrest.
 
According to Kim Marti, in 2015 Asian markets accounted for about 70 percent of total global long steel product consumption, with China alone accounting for more than 50 percent of the global figure. What happens in these markets is obviously felt all over the world, Mr. Marti remarked. Rebar took the biggest hit in the 2015 slowdown. Chinese demand contracted for the first time in years amid slowing economic growth and a property downturn. In the second half of 2015, an overall decrease of five percent was observed in global rebar consumption, mainly in China, the CIS and the Middle East. He added that the Turkish domestic rebar market showed growth, although the most recent available figures could be disrupted by some end-of-year speculative buying. 

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