Basson at worldsteel in Monterrey: Surprisingly robust scenario for steel demand given the economic conditions

Monday, 14 October 2019 00:58:01 (GMT+3)   |   Istanbul

At its 53nd annual meeting held in Monterrey, Mexico, on October 14-15, worldsteel (World Steel Association) released its short-range outlook report for global steel demand for 2019 and 2020.

Commenting on the situation in the steel markets at the release of the report, worldsteel general director Dr. Edwin Basson said that in a number of regions there was a surprising resurfacing of steel moving into construction-type projects, both in developed economies and also in developing economies. He stated that the indications are “there are two very different kinds of focus points in the sense that in developed economies, we do see some replacement activity in buildings, we do see some activity trying to make buildings more environmentally friendly and we also see some infrastructure replacement activities in developed economies.”

He added that, however, in developing economies there is construction activity growing on all fronts, and then there are these developing economies which are actually more strongly developed, which are part of the G20 grouping, with Turkey being one of these. In these, you have strong housing development taking place. Worldsteel, he said, has been remarking for the past five years on the impact of the movement of people from the country to the cities, and this has been seen in Turkey and in Southeast Asia as well, and in a few other places.

He went on to say, “One of the things, which has surprised us was that, given the uncertainty and the pessimism that we have seen in most steel markets and by listening to commentators from the steel markets, surprisingly enough when you add the figures up, it shows a very robust market, it shows a market that grows by 50 million metric tons from 2019 to 2020. There was a big discussion internally. Are we too optimistic? It may very well be that we are too optimistic this year, but then we said, let’s test this, and we went region by region saying what are the most negative scenarios that we can anticipate… but even factoring in the most pessimistic scenario, we still can claim to have global steel demand that grew not by 30 million metric tons but by something like 90 million metric tons on a global basis. So a surprisingly robust scenario for steel demand given the economic conditions and the only conclusion that I can come to - I don’t ascribe this to the economic committee - is that we are as an industry and as a product beginning to see the benefit of the fact that steel remains and continues to be seen as a very strong sustainable material in a number of markets and I think that that supports us a little bit on the downside.

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