The global steel industry has reached “an important inflection point” that requires steelmakers to consider new strategies to survive, World Steel Association Director General Edwin Basson said Thursday.
Speaking during the Eurometal World Steel Distribution & SSC Summit in Dusseldorf, Basson said current global installed steel capacity — at some 2.39 billion mt — is already enough to meet supply requirements through 2035.
Finished steel demand is likely to be around 1.535 billion mt in 2017, up only 1.3% from the previous year, and nearly 1.549 billion mt in 2018, an increase of 0.9% year on year, according to worldsteel.
Strong steel demand growth in developing countries will offset stabilizing demand in developed economies, but it means mostly flat overall global demand for likely the next two decades or more, Basson said.
Combine those factors with declining trends in steel use — due in part to increased production of high-strength, lightweight steels and a sharper focus on reuse and recycling — and the outcome is clear.
“We believe that steel demand, in terms of volume, has reached an important inflection point,” he said. “It will continue to grow, but the growth…is going to be much slower than it has been in the past two decades.”
Basson said a ton of steel remains in use for an average of 47 years in Europe, 44 in the US and less than 40 in China.
The global average is around 45 years. With technological improvements resulting in less steel being required in many applications and yielding longer lifespans for the material, those averages are likely to increase, he said.
“If it’s only five years that we’re extending the life of steel, it means that we’re pushing that demand forward five years,” Basson said. “As steelmakers and users of steel, we should begin to plan around this [knock-on effect].”
In addition, as emerging economies have developed their own domestic steel industries and global overcapacity has pushed tons into the export market, trade case filings in the US and Europe, in particular, have increased in volume in recent years. Basson cautioned that such a strategy is unlikely to be sustainable.
“Protectionism can help us in the short term… but it cannot in the long term provide stability in an industry that is driven by global forces,” he said.
Source: PlattsPrevious Next