Short Range Outlook for 2004 - 2005
30 Apr 2004Brussels, 30 April 2004 - The Short Range Outlook for 2004 - 2005 for the Apparent Consumption of Finished Steel Products is presented here in two parts, firstly an overview of the global economy and secondly an overview of the global steel outlook.
Global Economic Outlook
Starting late in 2003 there has been a gradual recovery in the global economy which has strengthened every quarter since. While the economies of the USA, Japan and Europe continue on course towards economic recovery, it is the growth in China that is one of the major factors currently driving the world economy. With a projected GDP growth of more than double all other world economies, China is by far the fastest growing global economy.
As a result of these economic developments, IISI is anticipating a much stronger growth than it did in its last Short Range Outlook in October of last year at the Annual Conference in October in Chicago. World GDP is projected to improve from 2.6% in 2003 to 3.8% in 2004 and 3.4% for 2005. In October, IISI projected world growth at only 2.2% in 2003, 3.1% in 2004 with no predictions for 2005. An overview of the World Growth Summary for the five years 2001 to 2005 is presented in Table 1.
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. Growth in the USA is projected to remain strong at 4.7% in 2004 and 3.6% in 2005. The outlook for Japan has improved significantly, having emerged from a long recession. Growth in Japan is now anticipated to be 3.1% for 2004 and 1.5% for 2005. Growth in the EU-15 is projected to improve substantially in the next two years. After bottoming out in 2003 with a growth of only 0.8%, growth in 2004 is projected to be 2.1% and 2.4% in 2005. Economic activity in China continues to remain robust with growth projected at 8.5% in 2004 and 8.0% in 2005 following a growth of 9.1% IN 2003.
World Growth Summary (GDP) - 2001 - 2005
2001 2002 2003 2004e 2005e USA 0.5 2.2 3.1 4.7 3.6 Japan 0.4 (0.4) 2.7 3.1 1.5 EU-15 1.7 1.1 0.8 2.1 2.4 China 7.3 8.0 9.1 8.5 8.0 WORLD 1.4 1.9 2.6 3.8 3.4 Global Steel Outlook
Global consumption of finished steel products is projected to increase by 6.2% or 53 million metric tonnes in 2004 and by 4.5% or 41 million metric tonnes in 2005 according to the estimates made by the Economic Studies Committee of the International Iron and Steel Institute. The growth can be clearly split into two separate areas, China and the Rest of the World (ROW). Steel consumption in China is estimated to increase by 13.1% or 31 mmt in 2004 and by 10.4% or 27 mmt in 2005. China has increased its share of global steel consumption from 13.5% (87 mmt) in 1995 to an estimated 30.3% (290 mmt) in 2005. China is currently projected to account for 61% (58 mmt) of the forecasted two-year global increase of 94 mmt in 2004 and 2005.
Steel consumption in the ROW, excluding China, is estimated to increase by 3.6% (22 mmt) in 2004 and by 2.2% (14 mmt) in 2005. The ROW is estimated to account for 39% (36 mmt) of the increased global steel consumption over the next two years.
Global Apparent Finished Steel Consumption Outlook - 2002 - 2005
million metric tonnes Annual % Change REGION 2002 2003 2004e 2005e 2002 2003 2004e 2005e China 186 232 263 290 21.0 25.2 13.1 10.4 Japan 72 74 74 73 (2.0) 2.9 0.3 (1.4) Other Asia 142 147 151 155 11.9 3.5 2.6 2.7 EU-15 139 140 143 146 (1.2) 0.9 2.3 1.9 Other Europe 38 42 44 45 4.7 11.2 3.9 4.0 CIS 30 31 32 33 (3.0) 2.7 2.6 2.3 NAFTA 133 131 139 141 2.3 (1.7) 6.0 2.0 South America 27 28 31 33 (3.2) 2.2 11.7 5.9 Africa 17 17 18 19 7.0 (1.5) 7.3 2.4 Middle East 21 22 22 23 10.6 3.0 3.1 3.0 WORLD 805 864 917 958 6.6 7.3 6.2 4.5 The IISI Economic Studies Committee at its meeting on 29 March, 2004 substantially revised the China consumption numbers for the years 1995 - 2005 to eliminate the double counting of coils and to use a higher yield factor of 0.90 in relation to crude steel production. China represents the biggest swing factor in the global steel consumption estimates from IISI and the revision corresponds to a significant improvement. China's consumption continues to rise sharply, but the annual rate of change has declined from 21.0% in 2002 to 10.4% in 2005.
Steel consumption in Japan is projected to rise 1.8% at an average annual rate of 0.6% over the years, 2003 - 2005. Total steel consumption will rise from 71.7 mmt in 2002 to 73 mmt in 2005. The Rest of Asia, excluding China and Japan, is projected to rise by 13 mmt from 142 mmt in 2002 to 155 mmt in 2005.
The EU-15 consumption of steel is projected to rise by 5.2% (7.3 mmt) at an average annual rate of 1.2% over the three years from 2003 - 2005. Total steel consumption will rise from 138.7 mmt in 2002 to 146 mmt in 2005.
Of the CIS Countries, Russian steel consumption accounts for the major portion of the figures with a projected average annual rate of 2.4% from 2003 - 2005 representing 1.7 mmt.
The consumption of steel in the USA is estimated to rise by 4.6% (4.7 mmt) at an average annual rate of 1.5% over the three years from 2003 - 2005. Total steel consumption in the USA fell from 103 mmt in 2002 to 100 in 2003 but is projected to rise to 106 mmt in 2004 and 107 mmt in 2005.
Commenting upon the latest economic forecast, the Secretary General of IISI, Mr Ian Christmas, said that, "The shortage of raw materials and congestion at sea ports was responsible for constraining steel production". He went on to question, "Whether, all further increases in steel consumption forecast over the next eighteen months would be realisable since there are restrictions relating to raw materials supply and not to steelmaking capacity."
Press enquiries: John Fewtrell - IISI, 120 Rue Colonel Bourg, 1140 Brussels or e-mail: press@iisi.be
