The international economic crisis has pushed the steel market into recession: the demand has sharply shrank, manufacturers have seriously reduced production leading to a decline in trade and implicitly in the price of steel worldwide. However, currently, these segments experience growths, the recovery rhythm being much more alert than expected.
Even though by the half of 2009, the steel market has suffered massive drops, the sector recovery has led to a 15% growth in 2010 (compared to 2009), which meant another record for steel production and use.
For 2010, the World Steel Association (WSA) reported growths of 5.3% in January (119 million metric tonnes), while in February the growth level reached 8.8%. Regionally, Asian countries, especially India and China have rapidly mended their steel market, due to stimulus packages focused on infrastructure and internal demand, while Europe was still being affected by crisis. As a result, these economies needed more time to recover. In 2011-2012, growths of 8% and 10% are envisaged for India and China respectively.
The steel demand on the Asian market is 17.6% higher than the pre-recession level; as opposed to this evolution, in the other regions there are still countries who report a level inferior to that prior to the recession. Growths could determine Asian countries to influence the global market by procurement activities initiated by foreign companies leading to a change in the business pattern of steel companies. “Currently, Chinese companies endorse massive investments to ensure raw material supply. We expect the Chinese companies would want to buy foreign companies activating in the steel area and these strategies would influence the industry globalisation”, declared Ian Christmas, General Manager WSA.By the end of 2011, apart from the Asian countries, the highest growth rates on the steel market will be noted in the CIS countries (11.1%), the US (9%) and Europe (5.7%).In Europe, Germany ranks first in steel production with a 7.9% growth (3.7 million metric tonnes, February 2011), followed by Italy (4.9% – 2.3 million metric tonnes). “The most developed steel market is Western Europe and Scandinavia, these two regions having a culture especially for stainless steel. High potential countries are China, India and Eastern Europe. Also, in the resources and transportation segment, growths are visible especially in the construction of trams and metro trains”, declared for Railway Pro Hans Geber, General Manager Outokumpu. In Europe, although business environment conditions have improved, customers will not easily change their customs in buying steel and they will definitely be more careful. This means that in 2011, the business sector will be at an average level, confronting with significant challenges and increased competitiveness. However, it seems that the steel market is on the right track.
by Pamela Luică
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