Global Steel Demand to Fall Further in 2016 - World Steel Association
April 13 2016 - 10:04AM
Dow Jones News
By Alex MacDonald
LONDON--Global steel demand is set to dip again this year before
recovering in 2017 as steel demand from China, the world's largest
consumer of the metal, continues to shrink amid slackening domestic
economic growth, the World Steel Association said on Wednesday.
Steelmakers around the world are slashing costs, cutting jobs,
and selling assets in a bid to preserve cash given the glut of
steel globally and slackening demand that have prompted China, also
the world's largest steelmaker, to export more abroad.
As a result, steel demand is forecast to shrink 0.8% to 1,488
million tons globally this year compared with a 3% drop last year.
It should then rise 0.4% to 1,494 million tons next year, aided by
increased demand from the European Union and countries such as the
U.S. and others in the North America Free Trade Agreement
region.
"The economic environment facing the steel industry continues to
be challenging with China's slowdown impacting [steel customers]
globally," said TV Narendran, chairman of the economics committee
at Worldsteel, an association that represents steelmakers that
account for about 85% of the world's steel supply.
In China, Steel demand is forecast to fall 4% this year and 3%
next year because of a "severe depression" in construction
activities, concerns about the country's real-estate market and a
mounting corporate debt problem. China's steel demand fell 5.4%
last year, prompting the country's steelmakers to sell their excess
supply abroad.
This has a knock-on effect on regional markets such as Europe
where India's Tata Steel Ltd.(500470.BY) announced plans to dispose
its entire U.K. business after more than nine months of consecutive
losses.
Appetite for steel in other emerging markets such as Brazil is
also set to continue falling this year before rising again in 2017.
A rebound in U.S. demand for the metal and continued EU steel
growth should contribute to a rise in global steel demand outside
China of 1.8% this year and 3% in 2017.
-Write to Alex MacDonald at alex.macdonald@wsj.com
(END) Dow Jones Newswires
April 13, 2016 10:49 ET (14:49 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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