During his presentation at the SteelOrbis 2023 Fall Conference & 89th IREPAS Meeting held in Istanbul on September 17-19, Alexander Gordienko, export director of Spain’s CELSA Group, talked about GDP projections first, saying that the global economy will see a slowdown from 3.5 percent growth in 2022 to three percent both in 2023 and 2024, compared to the expectation of 2.8 percent for 2023 in the previous growth projections in April. He added that that the global economy is recovering from the pandemic and returning to the pre-pandemic levels. Looking at the advanced economies which are expected to see a decline from 2.7 percent growth in 2022 to 1.5 percent in 2023 and 1.4 percent in 2024, US GDP is anticipated to grow by just 1.8 percent and the euro area GDP by 0.9 percent, both in 2023. However, he noted that the German economy is going into recession and is expected to contract by 0.3 percent in 2023 and anticipated to rebound by 1.3 percent in 2024.
On the other hand, the growth in emerging markets, which are currently affected positively by the appreciation of the US dollar, is expected to be stable at four percent in 2023 and to edge up to 4.1 percent in 2024.
Looking at the construction sector, Mr. Gordienko stated that construction in the euro zone is generally weak and activity is stagnant, while the US has a much better outlook with record house sales anticipated in 2023-25. Remarking that real estate activity is declining in China, he drew attention to India, saying that some improvement will be seen in the country’s real estate sector.
CELSA’s export director also shared estimated steel production figures for 2023, with the biggest rises anticipated in China, Iran, Russia and India. Noting that Chinese steel exports will be just below the record levels seen in 2015-16, he stated that the country will focus on flat product exports rather than long product exports. Answering a question regarding the effects of cheaper ex-Russia bille, due to sanctions, Mr. Gordienko stated that billet exports from Russia have slowed down significantly and noted that Russia will not be evaluated as a market price indicator in future.
Regarding consumption, the CELSA official stated that global long products consumption is expected to decrease by 0.5 percent to 876 million mt in 2023, compared to 881 million mt in 2022. Product by product, Gordienko said he expects consumption of sections, bars and wire rod to decrease by 3.8 percent, 2.9 percent and 1.4 percent in 2023, respectively, while rebar consumption is anticipated to increase by only 0.2 percent, all year on year. He added that some rebound in long steel demand from China is expected on the back of infrastructure construction activities.
Meanwhile, stating that prices had continued to slide down, Gordienko ended his speech by stating that he believes that there is not much room for speculation in the market following the price rebound seen in early September, while he evaluated the market outlook as being more optimistic than people think.