OECD: Global steel demand to rise six percent in 2011 and 2012

The outlook for the global steel industry is promising, with global demand forecast to increase by an annual six percent in both 2011 and 2012, according to industry and government officials at the OECD's Steel Committee meeting in Paris held on May 12-13. But downside risks remain, including further rises in steel raw material prices, continuing sluggish growth in advanced economies and high oil prices.
 
OECD Steel Committee chairman Risaburo Nezu said that, although recovery has been uneven, the world steel industry is recovering at a faster pace than many expected at the onset of the financial and economic crisis in late 2008. After a strong rebound in 2010, the recovery in global steel demand will slow this year, in line with slower growth in the world economy, he added.
 
Steel demand recovery in many advanced economies in particular remains lackluster, Mr Nezu stated. In contrast, demand in many emerging economies continues to increase steadily, supported by infrastructure investments, industrialization and further urbanization. This development is expected to continue with estimated demand increases of about six percent in both 2011 and 2012.
 
According to Mr. Nezu, this trend could be called into question if prices for steel raw materials, which are available in sufficient quantities and account for around 80 percent of overall production costs, continue to rise. Governments and industry will have to explore policy means to ensure secure, predictable and accessible supply of steel raw materials for all steel producers, he warned.
 
Other global risk factors include concerns regarding financial systems of many economies, remaining sovereign risks due to high levels of public debt, sluggish growth in advanced economies and high oil prices linked to geopolitical risks in the Middle East.