Apparent steel demand worldwide is expected to fall to 1.019 billion mt in 2009, down 14.9% over 2008, but could stabilize in the latter part of 2009 and recover slightly in 2010, Worldsteel said in a statement Monday.

 

Of all regions, NAFTA (Mexico, the US and Canada) is expected to see the biggest drop year on year at 88 million mt of steel used, down 32.2% over 2008, the report said. The US is to see the largest drop in demand in 2009 of all countries surveyed: -36.6% to 61.8 million mt.

 

Steel use in the EU-27 is to drop to 129.2 million mt, down 28.8%, while other European countries are to see a 25.7% drop in steel use, Worldsteel forecast. Demand in the CIS is set to fall 23.1% to 38.4 million mt.

 

Japan has also been affected by a sharp decline in the exports of its steel-using industries, especially automotive and machinery, the statement said. Apparent steel use is expected to fall by 20.4% in 2009.

 

Chinese demand is expected to drop 5% year on year to 404.4 million mt. "Emerging economies are being affected by the economic crisis as well, but to a lesser degree," the report said. Demand in Asia and Oceania as a whole is only forecast to fall by 8.1% year on year, while BRIC countries (Brazil, Russia, India and China) can expect a drop in apparent steel use of just 5.9%.

 

Steel demand is expected to drop 13.9% in Central America to 37.6 million mt, 8.9% in the Middle-East to 39 million mt, and by just 0.5% in Africa to 25.2 million mt.

 

The revised forecasts were set by Worldsteel's economic committee on April 26. "The progression of the US financial crisis into a global economic crisis brought about a massive and regionally synchronised global decline of steel demand in late 2008," the chairman of Worlsteel's economic committee Daniel Novegil said. "For most of the world this trend has continued into the first quarter of 2009. Improvement in steel consumption for the second half of 2009 will depend on the effects of government stimulation packages, the continued stabilisation of financial systems and a return of some consumer confidence."

 

The projections forecast by Worldsteel consider both real and apparent steel use. Apparent steel use reflects the deliveries of steel to the marketplace from the domestic steel producers as well as from importers. This differs from real steel use, which takes into account steel delivered to or drawn from inventories.

 

The board of Worldsteel will review a short-range outlook for 2010 at its board meeting in October 2009 in Beijing.

 

Worldsteel represents approximately 180 steel producers (including 18 of the world's 20 largest steel companies), national and regional steel industry associations, and steel research institutes. Its members produce around 85% of the world's steel. –Platts