During his presentation at the SteelOrbis 2023 Spring Conference & 88th IREPAS Meeting held in Barcelona on May 7-9, Alexander Gordienko, export director of Spain’s CELSA Group, talked about GDP projections first, saying that the global economy will see a slowdown from 3.4 percent in 2022 to 2.8 in 2023, with three percent growth expected in 2024. He added that the slowdown has been concentrated in the advanced economies, with US GDP expected to grow by just 1.4 percent and the euro area GDP by 0.7 percent, with the latter continuing to be affected the most by the war in Ukraine. On the other hand, emerging markets have been showing an acceleration. For example, Asia is expected to contribute almost 70 percent to global GDP growth this year, much greater than in previous years.
Commenting on the construction sector, Mr. Gordienko stated that the euro zone has been showing weak sentiment, while the previous pressure on the supply chain in the region is easing. In the US, building permits were up in February, signaling a recovery for the construction sector. Meanwhile, in China the residential sector is showing signs of stabilization, with property prices going up.
The CELSA official shared steel production figures for 2022, with the biggest declines seen in Africa, down almost 12 percent, and in the EU, decreasing by more than 12 percent. The only growths in steel production were registered in China and India. He also noted that China’s share in the world steel production stands at 53 percent. He also drew attention to Chinese steel exports which increased in the January-March period this year, explaining that “when it comes to China, even a small increase is worrying”.
In 2022, global long products consumption decreased by four percent, slightly better than the 5.5 percent decline expected at the last conference in Istanbul, amounting to 881 million mt. Looking at individual products, Mr. Gordienko said consumption of sections decreased by 10 percent or 5 million mt, rebar consumption declined by 3.6 percent to 411 million mt, and wire rod consumption decreased by 7.3 percent or 17 million mt to 217 million mt. Last year, Asia accounted for 68 percent of the global rebar consumption, while compared to ten years earlier Asia saw a growth of 33 percent in its rebar consumption, while the EU practically remained stable with four percent growth.
Gordienko has said that Russia returned to the exports markets in March, coinciding with China abandoning its zero-Covid policy. After the Chinese New Year holiday, the local consumption in the country was expected to rebound, but this never happened. On the other hand, following the devastating earthquakes which hit southern Turkey in February, the Turkish government announced the speedy rebuilding of the damaged cities, creating false hopes of extra demand that never seemed to come, he noted. As a result of these failed expectations, prices started to go down, he said. “Mills in the EU and Turkey reduced production levels, helping them to maintain margins for some time, but they are under pressure now from imports. High production costs are not there anymore. Energy costs have decreased substantially,” Gordienko said. He concluded his presentation indicating that demand for steel this year seems to be much weaker than supply, but that there are signs that the tide is turning and there are many reasons to be optimistic.