At the Steel Success Strategies Europe Conference in Paris organized by World Steel Dynamics (WSD), industry experts have been putting forward their forecasts for 2008.
Peter Marcus and Karlis Kirsis of WSD have said that they expect global demand will grow only moderately in 2008 (for the first time since 2001), and that global production will increase by just approx. 50 million mt. They have predicted a year of inventory liquidation for 2008, with profits to be down in many countries since not much upward price movement is expected.
On the other hand, costs are expected to go up sharply as a result of the surge in prices for scrap, iron ore and coking coal. WSD expects steelmakers' costs to go up by $50/mt or more, with iron ore prices increasing by 30 percent, coking coal prices up by $30/mt, and energy and freight costs also to be up substantially.
Another interesting forecast made by WSD was that at least one major Chinese steelmaking company will be merging with a major non-Chinese company because of difficult conditions in China next year. The top overseas candidates named were China Steel, Gerdau, JFE, Nippon Steel, NLMK, Nucor, Severstal, Tata, Ternium and TKS.
WSD also stated that the steel industry would enter an ’age of management' in 2008 with the best performing companies all having very influential figures at the helm.