Presentation on theme: "Outlook for the steel market"— Presentation transcript:
1Outlook for the steel market Sherpa group meeting, Bruxelles, 13 March 2014
2AgendaCurrent situation: global demand is slowly recoveringProspects for global steel demand until 2025Structure of EU steel exportsEU steelmaking excess capacityFinancial health of the European steel industry
3Apparent consumption of steel by region (Index 2007Q2=100, data from CRU)
4Production shares by region, % of world (before and after the crisis)
5Steelmaking capacity shares by region (% of world capacity)
6Regional steel trade developments (Thousands of tonnes)
7Sectors driving steel demand growth (in tonnage) during the next ten years 3 sectors expected to represent 90% of global steel demand growth up to 2025Construction (68%), driven by residential, infrastructure projects in emerging economiesMechanical engineering (13%)Energy transportation(9%), pipelines, OCTG and other tubes.
8Global steel demand by sector in 2011 and 2025 mmt and % of total steel demandCAGR 3.7%1414 mmt2349 mmtSource: Metal Bulletin Research
9Construction sector value added : growing share of emerging economies Shares in world construction value added in 2025:NAFTA (18.3%), EU (10.8%), Japan (6.2% ), China (24%)China’s construction VA: CAGR 5.9% in a catching-up process175 airports in China in 2010 compared to 5,194 in the USUrban residential floor space in 2011 was 31 m² per capita in China compared to 82 in the US.The urbanisation rate is expected to reach 51.5% in 2015 (target of 12th Chinese Five-Year Plan): 10 million new urban residents/yearIndia’s construction VA: CAGR 8.1% faster than China but from a much lower base.By 2025, India could have two cities of more than 25 million inhabitants (New Delhi and Mumbai)Strong infrastructure building also expected in South East Asia, Africa and the Middle East.
10Global steel demand for energy-related construction in 2011 and 2025 mmt and % of total steel demandCAGR 0%31 mmt31 mmtSource: Metal Bulletin Research
11Global steel demand in the transportation sector in 2011 and 2025 mmt and % of total steel demandPipelines CAGR 6.1%CAGR 2.7%274 mmt398 mmtSource: Metal Bulletin Research
12The steel industry is a major supplier to the energy industry Consumption of steel by energy industries (Mt)178 MT that is 12 % of total finished steel productionSource : Worldsteel, Eurofer, Laplace Conseil analysis & estimates
13Reducing quantity of steel per auto will limit growth in steel demanded by auto sector
14Strong growth of auto production expected to continue in China
18EU steel exports have shifted towards African markets from 2007 to 2012.
19The structure of exports -capturing the growth opportunity in emerging markets- The share of pipes and tubes (a major export item), has declined from 14.8% (2007) to 13.1% (2012) while bars became the largest export item in 2012.Exports of long products have been increasing steadily supported by robust construction activity in North Africa.Exports of high value-added products (e.g. galvanized sheets) have been increasing along with the growth of the auto sector in emerging markets.EU can take advantage of its good access to growing steel markets in Africa and Middle East.
20Demand growing strongly in Europe’s neighbouring regions