A look at the global market from CELSA SA

At the SteelOrbis IREPAS conference in Prague on Monday, speaker Maria J Barreiro-Vasquez from CELSA SA - representing the company's commercial director Mr. Ricardo Hugas - discussed the global market situation. The European economy will continue gaining momentum throughout 2006 and we will see a 6 million ton recovery for finished steel products. The construction market is expected to grow in France and Spain, though in Italy it has showed signs of weakening. However, the outlook for Italy's car market is improving. In the UK, the steel market is expected to pick up by 10% from 2005 to 2006, while in 2007 steel consumption is expected to grow in Poland and the Slovak Republic by 6 % and 7 % respectively. In Russia, the construction sector is expected to reach double digit-growth this year and next. Consumption for semis and flat products are expected to grow in both Russia and Ukraine as well. In 2005, the construction sector grew almost 20% in Turkey and is fueling steel demand with the same growth rate expected for the next two years. A 6.6% increase is expected in Turkey's finished steel production tonnage from 2006 to 2007. As for the Americas, it's estimated that the US will consume 111 million metric tons of finished steel in 2006, an increase from the previous year. South America's use of steel is expected to rise around 8% annually. Middle East Countries are seeing an increase in steel consumption also. Things are looking up in South Korea for 2006, with consumption growing 4.7%, while in Japan there's growth of 3.3%. China's market is expecting growth of 12% to 13% for the next two years. World long product consumption has been growing globally as well, with estimated figures of an 11.8% increase from 2005 to 2006. The potential wire rod figures for the 2006 year-end show East and Southeast Asia consuming and producing 61% of the world's wire rod. As for merchant bars, consumption and production is highest in East and Southeast Asia at 61%, followed by Western Europe at 15%, North America at 11%, CIS and EE at 8%, with the rest of the world coming in at 10%. In the years spanning from 1992 to 2006, consumption and production of rebar increased significantly with figures up 124%. Potential rebar markets broken down into the major world regions show that the major consumer is again East and Southeast Asia at 63%, followed by Western Europe at 19%, North America at 7%, CIS and EE at 3% and the rest of the world at 18%. For the year 2006 steel demand is expected to be strong in China, the Middle East, Russia and the CIS, and Latin America. Higher energy costs and transport costs are also expected for 2006.