Short Range Outlook for Steel Demand Autumn 29 OECD Steel Committee, Paris, 1 December 29 Content Short Range Outlook overview Background of the Forecast Regional overviews Conclusion 2 1
Short Range Outlook Overview 3 Global overview 28 (actual) 1,27 million metric tons, - 1.4% growth 29 (estimate) 1,14 million metric tons, - 8.6% growth 21 (forecast) 1,26 million metric tons, + 9.2% growth 4 2
Apparent Steel Use (ASU) years 25-21 ASU (mmt) and YoY Gr % % Gr mmt 12 8 4 1,53 7.5 1,147 9. 1,224 1,27 6.7 1,14 1,26 9.2 125 1 75-4 -1.4 5-8 -8.6 25-12 25 26 27 28 29 21 ASU mmt YoY Growth % 5 Regional Summary (updated October 29) In mmt, % 28 29 21 7/8 8/9 9/1 WORLD 1,27 1,14 1,26-1.4-8.6 9.2 EU-27 181 122 137-8.2-32.6 12.4 Other Europe 25 21 24-1.8-17.8 14.4 CIS 49 34 37-13.5-3.8 8.2 NAFTA 129 83 97-8.2-35.8 17.1 C & S America 44 33 37 6.5-24.4 9.7 Africa 26 26 29 11.4.4 11.4 Middle East 43 39 43 6.9-9.8 1.6 Asia & Oceania 79 745 82 1.8 5.1 7.6 6 3
1975 1976 1977 1978 1979 198 1981 1982 1983 1984 1985 1986 1987 1988 1989 199 1991 1992 1993 1994 1995 1996 1997 1998 1999 2 21 22 23 24 25 26 27 28 29F 21F Background to the Forecast 7 Steel in the Global Crisis % 1 8 GDP ASU 6 4 2-2 -4-6 -8-1 source: worldsteel, Global Insight 8 4
Steel-using sectors Deepest decline in decades especially auto % 3 2 1-1 -2-3 -4-5 1q 1q 1q 1q 1q 1q 1q 1q 1q 1q 1q 1q 1q 1q 1q 1q 1q 1q 1q 1q 1q 1q 1q 1q 1q 1q 1q 1q 1q 81 82 83 84 85 86 87 88 89 9 91 92 93 94 95 96 97 98 99 1 2 3 4 5 6 7 8 9 Construction Automotive Mechanical Engineering Metal Goods Source: Oxford Economics 9 IMF World GDP Growth forecast revisions % 6 5 4 3 4.9 4.8 5. 4.8 3.8 3.7 4.1 3.9 3.9 3. 3.7 3.4 3.2 3.1 3. 2 2.2 1 28 29.5-1 -2 Apr-7 Oct-7 Apr-8 Jul-8 Oct-8 Nov-8 Jan 28 '9 Apr 16 '9-1.3-1.4 Jul 8 '9-1.1 Sep 22 '9 1 5
Global recovery in sight In Q3, globally observed signs of recovery 2 GDP Growth Rate (%, Seasonally Adjusted Q-t-Q) Industrial Production Growth (%, Y-o-Y) 3 15 25 2 1 15 5 1 5-5 -5-1 -15 China -1-15 Advanced Economies Emerging Markets World -2-25 -3-35 EU Japan USA World -2 1Q 27 2Q 27 3Q 27 4Q 27 1Q 28 2Q 28 3Q 28 4Q 28 1Q 29 2Q 29 3Q 29-4 Jan-8 Apr-8 Jul-8 Oct-8 Jan-9 Apr-9 Jul-9 Source: Global Insight Source: Global Insight 11 Steel recovery China leading the recovery % 3 2 1-1 -2-3 -4-5 -6-7 Jan-8 Feb-8 Mar-8 Apr-8 May-8 Jun-8 Jul-8 Aug-8 Sep-8 Monthly Crude Steel Production (y-o-y%) Oct-8 Nov-8 Dec-8 Jan-9 Feb-9 US EU (27) China India Asia ex. China & India S.America Middle East C.I.S. 12 Mar-9 Apr-9 May-9 Jun-9 Jul-9 Aug-9 6
Underlying Macroeconomic Assumptions Global recovery momentum progresses with: continued policy coordination and proper timing of Exit Policies no immediate inflationary pressures resilience of emerging economies pulling global economic growth Gradual improvement in financial markets continues. No escalation of trade protectionism. 13 Regional Overview 14 7
NAFTA In mmt, % 28 29 21 7/8 8/9 9/1 21 ASU match point WORLD 1,27 1,14 1,26-1.4-8.6 9.2 28 NAFTA, of which: 129 83 97-8.2-35.8 17.1 1991 USA 98 6 72-8.9-38.7 18.8 1983 Canada 14 1 12-7.9-27.5 12.8 1989 Mexico 16 12 14-4.5-25.7 12.3 21 15 Central and South America In mmt, % 28 29 21 7/8 8/9 9/1 21 ASU match point WORLD 1,27 1,14 1,26-1.4-8.6 9.2 28 C & S Am, of which: 44 33 37 6.5-24.4 9.7 26 Argentina 5 3 4 3.7-4.5 24.9 25 Brazil 24 19 2 8.6-22.1 8.6 26 Venezuela 3 3 3-6.8-12.9 1.5 26 16 8
EU-27 In mmt, % 28 29 21 7/8 8/9 9/1 21 ASU match point WORLD 1,27 1,14 1,26-1.4-8.6 9.2 28 EU-27 181 122 137-8.2-32.6 12.4 1992 Germany 41 29 32-4.1-29.5 1.2 1996 France 16 11 12-6.5-32.3 12.5 1993 Spain 18 12 12-22.9-35.9 6.8 1995 Italy 33 23 25-9.6-32. 12.4 199 UK 12 7 9-6.9-37.6 24.5 17 CIS and Other Europe In mmt, % 28 29 21 7/8 8/9 9/1 21 ASU match point WORLD 1,27 1,14 1,26-1.4-8.6 9.2 28 CIS, of which: 49 39 37-13.5-3.8 8.2 2 Russia 35 25 27-12.2-29.5 8.5 24 Ukraine 7 3 4-16.5-5.8 9.7 1999 O. Europe, of which: 25 21 24-1.8-17.8 14.4 26 Turkey 18 16 18-12. -11.6 15.1 26 18 9
Asia and Oceania In mmt, % 28 29 21 7/8 8/9 9/1 21 ASU match point WORLD 1,27 1,14 1,26-1.4-8.6 9.2 28 Asia & Oceania, of which: 79 745 82 1.8 5.1 7.6 21 China 443 526 553 2.7 18.8 5. 21 India 51 56 63 -.2 8.9 12.1 21 Japan 76 53 61-4. -31.3 15.8 1983 South Korea 59 46 53 6.1-21.3 15.7 27 Thailand 14 1 11 6.4-26. 12. 23 Asia & O. w/o China 266 219 249.4-18. 13.5 26 19 Africa and Middle East In mmt, % 28 29 21 7/8 8/9 9/1 21 ASU match point WORLD 1,27 1,14 1,26-1.4-8.6 9.2 28 Africa, of which: 26 26 29 11.4.4 11.4 21 Egypt 7 9 9 19.6 32.9 6.3 21 South Africa 6 5 6 2.3-24.5 2.4 27 Middle East, of which: 43 39 43 6.9-9.8 1.6 21 Iran 16 16 18-3.1 5.1 7.9 21 Saudi Arabia 9 8 9 1.8-6.9 12.3 21 U. A. Emirates 1 6 6 44.6-39.2 1.2 29 MENA 57 54 59 2.3-5.1 8.9 21 2 1
BRIC overview In mmt, % 28 29 21 7/8 8/9 9/1 21 ASU match point WORLD 1,27 1,14 1,26-1.4-8.6 9.2 28 BRIC 554 626 663 1.6 13. 5.9 21 CHINA 443 526 553 2.7 18.8 5. 21 World excl. BRIC 653 478 543-3.8-26.8 13.6 21 World excl. China 764 577 653-3.7-24.4 13.1 23 21 Regional share in world steel demand Evolution through years 25-21 25 56.5 15.7 13.1 14.7 26 55.1 17.9 13.5 13.5 27 56.9 18.7 11.5 12.9 28 58.7 17.2 1.7 13.4 29 67.5 11.6 7.5 13.4 21 66.5 13. 8. 12.5 Asia EU-27 NAFTA ROW 22 11
Top 1 Countries 25 and 21 TOP 1 (25) TOP 1 (21) Country ASU (mmt) Country ASU (mmt) China USA Japan South Korea India Germany Italy Russia Spain Taiwan, China 354.75 15.38 78.73 47.124 39.9 35.258 31.6 29.251 2.895 19.91 China USA India Japan South Korea Germany Russia Italy Brazil Iran 552.554 71.668 62.72 6.8 54.615 31.811 25.853 25.3 2.3 17. 6 5 4 3 2 1 Top 1 accounts for 77% of world ASU in 21; whereas in 25 = 72% ASU (mmt); (%) of China vs. World 526.241 552.554 431.313 442.964 354.75 385.526 48% 46% 35% 37% 34% 15.38 34% 119.61 17.999 98.49 39.9 45.6 51.48 51.36 55.93 6.326 62.72 71.668 25 26 27 28 29 (e) 21 (f) China India US 23 Crude steel production Jul 28 Oct 29 Production (mmt) Growth (% year on year) 125. 6. 1. 4. 75. 2. 5.. 25. -2.. Jul-8 Aug-8 Sep-8 Oct-8 Nov-8 Dec-8 Jan-9 Feb-9 Mar-9 Apr-9 May-9 Jun-9 Jul-9 Aug-9 Sep-9 Oct-9 China (mmt) World (mmt) ROW (mmt) China (%) World (%) ROW (%) -4. 24 12
Global steel capacity utilisation ratio 28 29 1% 9% 8% 86.7% 9.8% 7% 76.% 6% 58.3% 5% 4% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct 28 29 25 Conclusions The US financial crisis brought about a globally synchronised downturn initially, but differential speed of recovery among countries resulted in a significant change in the landscape of global steel industry. Global recovery began earlier than expected, but robustness and resilience of recovery still remains at large. Both upside and downside risk to the forecasts significant at this time. Beyond recovery, healthy growth will return supported by emerging economies sound economic fundamentals. 26 13
Cover photo by Daniel Rodríguez Molowny 14