Growth in China coupled with economic recovery in the U.S., Japan and Europe should continue to drive the world economy and world demand for steel, according to the International Iron and Steel Institute (IISI), Brussels.
IISI says it is “anticipating a much stronger growth” than it did in its previous Short Range Outlook, released in October of 2003 at the IISI Annual Conference in Chicago. “World GDP is projected to improve from 2.6 percent in 2003 to 3.8 percent in 2004 and 3.4 percent for 2005,” the group predicts in an April news release.
“The economic growth outlook for the three major world economies all reflect a strong recovery that appears to be sustained and is projected to remain positive,” the release notes. “Growth in the U.S. is projected to remain strong at 4.7 percent in 2004 and 3.6 percent in 2005. Economic activity in China continues to remain robust with growth projected at 8.5 percent in 2004 and 8.0 percent in 2005 following a growth of 9.1 percent in 2003.”
Global consumption of finished steel products is projected to increase by 6.2 percent (or 53 million metric tons) in 2004 and by 4.5 percent (41 million metric tons) in 2005, according to the estimates made by the Economic Studies Committee of the IISI. The growth can be split into two separate areas, China and the rest of the world.
Steel consumption in China is estimated to increase by 13.1 percent (31 million metric tons) in 2004 and by 10.4 percent (27 million metric tons) in 2005. Steel consumption in other nations, excluding China, has been estimated to increase by 3.6 percent (22 million metric tons) in 2004 and by 2.2 percent (14 million metric tons) in 2005.
Commenting upon the latest economic forecast, Secretary General of the IISI Ian Christmas says, “The shortage of raw materials and congestion at sea ports was responsible for constraining steel production.” He adds that it is unclear whether the predicted production increases can actually occur, “since there are restrictions relating to raw materials supply [although] not to steelmaking capacity.”