The industry is the most vulnerable sector to financial crisis, its vulnerability influencing the world steel demand. According to the World Steel Association (WSA), the global steel capacity utilization ratio was of 72.9% in January 2010, (+11.6%).
This statistical data applies in 66 countries from Europe, the Commonwealth of Independent States, North and South America, Middle East and Asia. For the 66 countries, in January 2010, the gross steel production was of 109 million metric tonnes, which represents a 25% increase compared to the similar period of 2009, the World Steel Association reports (WSA).
China remained leader of the international market in January 2010 with 48.7 million metric tonnes and an 18.2% growth, followed by Japan with 8.72 million metric tonnes and the USA with 6 million metric tonnes. Japan’s production increased by 36.8% during the first month of the year, while the US production increased by 48.8%. Romania’s steel production increased by 86.2% in January 2010, as compared to the similar period of 2009, to 275,000 tonnes, while the international market recorded a 25.5% growth to 109 million tonnes according to the estimations of the World Steel Association (WSA). “For Romania this growth means more jobs, electric power consumption, material consumption but taking into consideration the fact that the major part of steel production is exported, we should be more sceptical with respect to the domestic economic recovery”, declared Petru Ianc, General Manager within the Romanian Ministry of Economy specialized in ferrous metallurgy.
In January 2009, the Romanian ferrous metallurgy delivered 148,000 tonnes, while in December the production reached 270,000 tonnes. The Romanian steel production dropped by 46.4% to 2.7 million tonnes during 2009. The most important steel manufacturer in the European Union was Germany, with 3.4 million tonnes, 27.7% more as compared to January 2009. Spain manufactured 1.4 Million tonnes of raw steel in January 2010, 51.1% more as compared to January 2009, while the French production of steel was of 1.1 Million tonnes, 32.3% more than in the same month of the previous year. Russia manufactured 5.2 million tonnes of raw steel in January 2010, 33% more as compared to the same month of 2009, while Ukraine’s production of steel in January 2010 was of 2.7 million tonnes, 28.4% more than in January 2009.
Globally, the steel work utilization ratio was of 72.9% in January 2010, a growth of 71.9% being recorded in December 2009. By comparison with January 2009, the steel capacity utilization ratio increased by 11.6% in the beginning of 2010. For steel manufacturers, the rapid development of the solar and wind energy sector determined a growth in demand. The railway sector is also of interest to major companies. The world steel demand in the railway sector has known a 3% growth, determining a turnover of USD 11 Billion. Steel plays a significant role on the railway market requiring both transport and being used in the railway industry. Therefore, the growth of steel production capacity generates the growth of railway transport market share, determining railway companies and authorities to adopt new strategies for infrastructure, industry and technology on long, as well as medium term.
World’s major players
The main steel manufacturing companies are located in emerging countries, such as Russia, China, India and Brazil. ArcelorMittal is the largest steel manufacturer in the world and develops activities in the railway sector, as well as automotive and construction industries. In 2009, the company had revenues estimated at USD 65.1 Billion, the gross steel production reaching 73.2 million tonnes. According to the company, EBIDTA profit ratio is expected to increase from USD 1.8 Million to USD 2.2 Million during the first three month of 2010.
For Mechel, the steel production dynamics increased by 31% during Q4 of 2009, while, in 2009, the steel capacity utilization ratio reached 100% by comparison with the ratio before the financial downturn. During 2009-2012, the company plans to invest USD 2.9 billion in capital priority projects. “Mechel’s priority in metallurgy is to build a railway line and finalize the construction of the plant in Chelyabinsk (Russia), the plant operation being expected to increase the quality account of railway products”, the company’s board declared. Voestalpine also knew a profit growth during 2009-2010. Thus, the company’s incomes have increased from EUR 2.067 Billion to EUR 2.083 Billion, earnings before interest and taxes have recorded an 87.5% growth reaching EUR 132 Million (from EUR 70.4 Million). During the same period, profit increased from EUR 28.3 Million to EUR 71.5 Million. “In 2009-2010, we evolved from losses to positive figures and we had substantial profits”, CEO Voestalpine AG Wolfgang Eder declared. The global economic recovery comes from Asia, especially China and India, but also Brazil. In regards to the world economic evolution, steel production began its ascent in the summer of 2009 with unaltered demands from China. Although the world’s production capacity has dropped temporarily, it was immediately reactivated and generated price competitions in several regions, especially from Europe, towards the end of 2009. China’s economic recovery, which began in the summer of 2009, has continued in Europe although at lower paces. Even though the rhythm of the economic recovery in Europe was slow, the economic sector has recorded encouraging positive results in Germanic countries and in Northern Europe.
The industry situation is also different. The solar and wind energy sector has known a real boost, as well as conventional energy. The economic ascent in the industry of machines and commercial vehicles was limited. Performances in the European construction industry and construction materials were still average, depending on the region and sector. For example, the railway infrastructure demand maintains a good level. Nevertheless, the economic recovery rhythm is expected to grow in 2010, while the danger of slipping back to global economic distress will drop. This evolution is determined by a strong economic consolidation in Western Europe, as well as and a gradual recovery of the economy in Asia and South America, and an economic growth in USA.
by Pamela Luică
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