A new report from the British consulting firm MEPS forecasts world steel output reaching a record 1.350 billion metric tons this year. If attained, this year’s global steel production figure would be an 11 percent increase from last year’s total.
Meanwhile, blast furnace iron production is predicted to reach 994 million metric tons this year, also a record. Production increases are expected to continue into 2011.
The previous peak year for global iron and steelmaking occurred in 2007 when global steel production reached almost 1.345 billion metric tons.
The current short recovery period is almost entirely due to the economic stimulus packages by the Chinese government. With China accounting for almost 50 percent of both supply and demand, strong activity in this country will have a positive impact on the global steel scene.
The final figure for world steel output last year is expected to be 1.218 billion metric tons – a decline of 8.2 percent from 2008. Blast furnace iron production in 2009 is expected to drop by 3.3 percent to 896 million metric tons from 2008. Direct reduced ironmaking last year, at 62.3 million metric tons, is a drop of 9 percent from the prior year.
Only four major steel producers posted increases in iron and steel production last year. A substantial rise in Iran and modest improvement in Saudi Arabia will lead to gains in the Middle East. Substantially higher activity in the Chinese steel sector and steady progress in India will result in total Asian supply increasing by more than 3 percent.
MEPS predicts output gains across all regions over the next two years. Double digit increases are anticipated for most industrialized nations this year as companies partly recover from large reductions in the previous year. Modest rises are expected for the developing countries in the CIS, Africa, South America, Middle East and Asia.
The 2009 steel output in the European Union will be close to 138 million metric tons – a drop of 30 percent from 2008. Double digit reductions in steel manufacturing took place in all the 19 producing member states. Mills in Belgium, Bulgaria and Sweden took the biggest hit, with almost 50 percent decreases in output. Greece, Luxembourg and Slovakia were the least badly affected.
Raw steel production through the rest of Western Europe last year will be about 29 million metric tons, a 9 percent drop from the prior year. Blast furnace ironmaking will be marginally down, due to new capacity installed recently in Turkey.
Crude steelmaking in the CIS showed a mini revival in the second half of 2009, but still recorded a figure of less than 100 million metric tons for the first time since 2001. The year-on-year decrease was close to 15 percent. Local demand in most countries in the CIS has started to increase.
MEPS forecast CIS blast furnace iron and steel production in 2010 rising to 77.6 and 100.5 million metric tons, respectively - an increase of about 8 percent over the previous year’s figure.
The global recession had a major impact on the steel sector in the NAFTA region in 2009. Output fell by one third last year from the prior year. Integrated mills took the biggest hit, with blast furnace iron production dropping by about 40 percent.
South American steel production declined slightly more than 20 percent in 2009 from the prior year. Both domestic and export demand fell dramatically as the global economic recession set in. On a positive note, output started to recover in the second half of the year. Further gains are predicted to occur in 2010 and 2011 in both iron and steelmaking. In fact, we forecast a new record high level of steelmaking in the region in the latter year.
Total African steelmaking in 2009 fell by about 20 percent, year on year. However, we predict a solid recovery in 2010 but it will be insufficient to reach the outturns in the period 2006 to 2008. In fact, it is likely to be several years before new record high levels are achieved.
Middle East steel production continued to prosper last year. Output will be an “all time high” at more than 17 million metric tons. Further solid growth will occur in the following two years as new plants come on stream. Steelmaking should climb to near 20 million metric tons in 2011.
Crude steel output in Asia in 2009 was about 3 percent above the figure reported in the previous year. At more than 790 million metric tons, this is a new record output and represents eleven consecutive years of growth. New all time peak values are forecast for 2010 and 2011. Most of the expansion of steelmaking has been undertaken, via the blast furnace/oxygen steelmaking route. Consequently, pig iron production has also increased to reach a figure of approaching 675 million metric tons in 2009. This pattern will extend well into the future.