Speaking at the SteelOrbis 2016 Fall Conference & 75th IREPAS Meeting being held in Vienna, Kim Marti, the international sales director of Spanish steel producer Celsa, said that final data for 2015 regarding world steel consumption confirmed that last year was the end of a long growth cycle that was based on the rapid development of China, adding that the final numbers are even worse than forecast. In 2015, world steel consumption was 1.5 billion mt, down three percent year on year because of the slowdown in China.
Mr. Marti said that the world steel consumption is expected to decline further in 2016, while Russia is looking better and will probably achieve stabilization of steel consumption in 2016. He went on to say that global steel capacity utilization was at its lowest at the end of 2015 and then moved up in the second quarter of this year, though switching to a declining trend in July again. Kim Marti added that in China the directives to improve efficiency are in place and environmental inspections started in June. Therefore, he expects that this will force a significant drop in production. Chinese steel production is forecast to decline to an annualized 760 million mt in October this year. He stated that restructuring actions are also continuing in Europe and the US amid temporary and permanent stops and shutdowns. Mr. Marti pointed out that excess supply is still an issue but significant adjustments had already started in 2015. He emphasized that the steel industry needs to attract investors and lenders.
According to the Celsa official, in the second half of 2015 global long steel consumption went down by seven percent year on year, mostly affected by the slowdown in China, while the EU and Turkey saw growth. He considers that the global long steel market is closer to stabilization because the drop in China was not so big and also long steel consumption in Turkey accelerated during the first half of 2016. On the other hand, he said that the annual wire rod consumption growth in the US shifted from positive in the second half of 2015 to negative in the first half of 2016 probably due to the slowing down in the end-user industries.
Answering a question on whether Brexit will change anything especially for the Celsa mill in London, Mr. Marti said that in general Brexit is good for the industry because of the depreciation of the UK currency “which always helps”. However, he said that their London mill will stay busy as long as London is busy and he expects London to remain the financial center of Europe.