STEEL BOOM IN DEVELOPING COUNTRIES BUT STAGNATION IN INDUSTRIALISED NATIONS
29 July 2003
June figures for crude steel production confirm the forecasts that we have been making, showing as they do, a distinct slowing down in the rates of expansion witnessed in the earlier part of this year. We expect growth to slacken further in the second half.
The International Iron & Steel Institute`s regular compilation of production statistics puts June output at 78.6 million tonnes, up by 4.4 million tonnes or 5.9 percent
from the same month last year. The figures are not directly comparable because Algeria - where Lakshmi Mittal`s LNM group now owns the major steel producer - only began reporting its monthly output in 2003. The country produced 562,000 tonnes in the first half of this year; there are no comparable figures for 2002.Ignoring this slight discrepancy, combined output by the 63 countries covered by the IISI report reached 465 million tonnes in the first half of this year. This was 35 million tonnes or 8.2 percent higher than the record tonnage produced in the first half of 2002.
China was of course responsible for much of the increase. Its June output at 18.4 million tonnes was up 23.5 percent
year on year, and was almost twice as much as the world`s second largest steelmaker, Japan, produced that month. China`s January-June total was a record breaking 103 million tonnes, 21 percent up on last year`s first half.Na dann könnt ihr Euch ja vorstellen, was mit den Zahlen abgehen wird....!
China has massive expansion plans for its steel industry but will not be able to maintain a 20 percent rate of growth indefinitely. With record tonnages of imported steel products, the danger of over supply is looming once again. There are also question marks over China`s ability to source sufficient raw material (particularly iron ore, but also scrap) to sustain its continued rapid growth in domestic production.
Leaving China aside, however, a different picture emerges of the global steel balance. June output in the rest of the world was less than 1 million tonnes, or 1.4 percent, higher than in the same month in 2002 - a marked slow down in year-on-year growth from the values seen in recent months.
Even with a reduced rate of expansion in the second half, 2003 will still see a new record level of global crude steel production - barring any unexpected setbacks. This is likely to be around 940 million tonnes compared with the 899 million tonnes produced last year, itself an all time high.
While China will continue to be the main contributor to the increased output in the second half of this year, other countries and regions are providing extra tonnage too. The production rate is likely to remain firm in the former USSR, Turkey, India and several Asian countries, as well as in the Middle East. This will offset probable decreases in the industrialised nations - including European Union, Canada and Japan.
ASIAN MARKET PRICE SCENE
FLAT PRODUCTS
Although the supply/demand situation in the Japanese distribution sector is quite satisfactory at the moment, thanks to the mills output curbs, there is concern for the future. Real consumption is lack lustre and inventories are gradually growing at the mills, coil centres and the ports. Total stocks of strip products, as end May 2003, increased 4.4 percent from April - the third consecutive monthly rise. Similarly, quayside warehouse inventories of imported flat products, over the same time period, went up 9.5 percent to the highest level in the last 12 months.
The South Korean steel sector is performing well. However, the general economy is suffering because of industrial unrest in several industries, including rail and shipyards. There is pressure from workers for higher wages and better working conditions. Steel exports have picked up again and the mills report business in China to be recovering quite quickly. They are shipping large tonnage at higher prices.
The Taiwanese economic situation is less buoyant. The recent SARS outbreak knocked confidence in the business community, although it has not seriously affected the steel trade. The worst now appears to be over. The flat products sector is more positive now and prices are reflecting the change, driven forward by higher pig iron and scrap costs. Exports to China have recommenced. However, traders are treading cautiously because they fear that a correction will occur in October/November, when the Chinese quotas fill up.
LONG PRODUCTS
In Japan, demand from construction and civil engineering projects is reasonably low. Predictions for new housing and non-residential work are gloomy. In contrast, high levels of activity in housebuilding and infrastructure are boosting demand for long products in South Korea. The Taiwanese building sector is stable. However, recent developments in scrap and billet costs have had a very positive effect on long product values.
Source: The above article was taken from INTERNATIONAL STEEL REVIEW from MEPS (International) Ltd. INTERNATIONAL STEEL REVIEW contains independently researched steel prices in a tabular format. For a free sample copy please visit: www.meps.co.uk WORLD STEEL PRICES are now available free at www.meps.co.uk
Na dann könnt ihr Euch ja vorstellen, was mit den Zahlen abgehen wird....!