The well respected World Steel Association has come out with a comparatively bullish report on the prospects for steel demand next year after a contraction of 8.6% this year. This year’s modest contraction numbers hide the imbalance of a drop of 24.4% in the world ex China and growth of 18.8% in China. The continuing strength of the Chinese market will see the country make up a staggering 47.7% of global steel demand this year.
Looking to 2010 the association is expecting global demand to recover by 9.2% to a total of 1206 million tons from 1104 million tons in 2009, back to virtually the same as 2008. Encouragingly the association sees the recovery being led by North America where demand is forecast to grow by 17.1% admittedly following a 35.8% decline this year.
Even so world demand excluding China is still expected to remain some 14% below 2008 levels during 2010 suggesting steel mill utilization rates will remain depressed and hence the ability of mills to raise prices severely limited. Even China’s growth is set to cool with “only 5% growth predicted for next year. Steel prices in China have already peaked and in some cases come off according to the MetalMiner IndX.