During the "New Horizons in Global Steel Markets" 12th Annual Conference organized by SteelOrbis in Istanbul on November 2, Dr. Baris Ciftci, head of raw materials at the World Steel Association (worldsteel), discussed the situation in the global steel industry, particularly in relation to raw materials, and gave some forecasts for the coming years.
In 2016, global raw material demand was recorded at 1.5 billion mt and global finished steel demand totaled 1.6 billion mt, Dr. Ciftci stated. Growth in global steel demand is expected to slow down in the coming period as the growth in China’s steel demand, which had reached an all-time-high in 2013, has slowed down because of the country's focus on a consumption-based strategy instead of an economic policy based on investment. Although the changing demographic structure, increasing population, infrastructure works and urbanization in emerging countries supports global steel demand, the rapid uncontrolled growth of China in previous years is not expected to be continued in the coming period. In short, it is predicted that global steel demand, which grew at a rate of 4-7 percent annually in the past 20 years, will now grow at a slower rate.
In 2016, 75 percent of global steel output was produced by integrated plants and the remainder was produced by electric arc furnaces, the worldsteel official stated. Compared to the year 2000, the share of electric arc furnaces in global steel output has declined dramatically. According to Dr. Ciftci, the main reason for this is the increase in integrated facilities in China. However, considering the excess capacity issue and the production cuts to solve the overcapacity problem in China, as well as the increase in global scrap supply, it is thought that the share of electric arc furnaces in global output will increase in the coming period. On the other hand, it is observed that the tight supply of graphite electrode has had a negative impact on electric arc furnace facilities.
Looking at the raw material markets, Dr. Ciftci said that global iron ore supply is sufficient, but the problem is that the supply of higher quality ores such as pellets and lump is falling and this drives prices. Global scrap supply is expected to increase significantly, he added. It is anticipated that global scrap supply, which totaled 720 million mt in 2016, will reach 1.0 billion mt in 2030 and 1.3 billion mt in 2050. Dr. Ciftci concluded by saying that scrap supply is expected to increase in emerging countries, especially in China.