Global steel long-term outlook Q1 2016 Report

Commodity Market Report 31 March 2016

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Report summary

The current slowdown will be a drawn-out affair and over the next few years, the steel industry will have to learn to celebrate small and infrequent victories. The one material victory for steelmakers in Q1 has been a stronger than expected increase in steel prices. Having in most cases fallen below 2009-lows during the turn of the year, steel prices have since regained between 1% and 23%. However, we do not expect to see any further sustainable improvement till after 2018. Weak demand, persistent overcapacity and low raw material prices will continue to limit the possible recovery in prices. As the year progresses so an increasing number of dreams for a speedy recovery for global steel consumption will be shattered. Overall as part of this update, we have revised down our global long-term steel demand forecast by a further 4.8% to 1,820 million tonnes in 2035. In line with this crude steel production has also been revised down by 4.7% to 1,955 million tonnes.

China
- Summary
- Demand
- Chinese construction to stagnate, then decline
- Manufacturing sector –reforms will benefit long-term growth
- Trade
- Exports peaked in 2015 and will increase again in the long term
- Production and capacity
- Cutting capacity– a long way to go
- 3 more item(s)...
Japan
- Japan's construction demand to expand in 2016
- but manufacturing and destocking will offset growth
- Japan steel trade balance will deteriorate
South Korea
Taiwan
India
- Shattered hopes
- Conservative demand prospects
- Long-term growth prospects remain
- India remains a difficult place to bring on new steelmaking capacity
- Long-term outlook for steelmaking remains highly uncertain
Malaysia
Indonesia
Thailand
Vietnam
Philippines
Europe
- EU construction growth will remain inconsistent
- EU automotive demand strong
- Europe production growth will be slow
- Capacity reductions are not enough to increase utilisation rates
Turkey
- Construction stock overhang weighs on steel demand
- Consumer goods will keep steel consumption growing
- Steel producers suffer from cheap competition
11 more item(s)...

Tables and charts

This report includes the following images and tables:

Imports will continue to place pressure on crude steel production

A weak krone and low oil price reduces steel demand in Norway
Demand growth remains subdued
Despite registering growth in 2015, 2016 is shaping up for a sharp decline in crude steel production
Key China forecast data
Key plans in the next five years
Chinese regional railway plans – more than 36,000 km of regional railways will be built by 2020
Steel demand in the construction sector
Steel demand in manufacturing-related sectors
Steel exports are expected to reach ~120 million tonnes in the long term
34 more item(s)...