MEPS forecasts world steel output at 1350 million tonnes in 2010. This will be an all time high figure and represents an increase of approximately 11% over the anticipated outturn in the previous twelve months. Blast furnace iron production is also predicted to reach a record level in 2010. At 994 million tonnes, it would be almost 11% above the result a year earlier. Further significant gains are foreseen in 2011.

MEPS said that "The last peak year for global iron and steelmaking occurred in 2007 at almost 947 and 1345 million tonnes, respectively. Our latest forecast for 2010 indicates that the return to past glory will take just three years. This compares with 5 years in the early 1980’s and eight years in the 1990's."

It said that the current short recovery period is almost entirely due to the economic stimulus packages put in place by the Chinese government. With China accounting for almost 50% of both supply and demand, strong activity in this country, will have a positive impact on the global steel scene.

MEPS global crude steel production estimates

In million tonnes)
(f) - Forecast
(e) - Estimate

The final figure for world steel output in 2009 is expected to be 1217.5 million tonnes, down by 8.2% YoY. Blast furnace iron production is predicted to have slipped to 896 million tonnes in the same period. This is 3.3% below the 2008 figure. Direct reduced iron making in 2009, at 62.3 million tonnes, will be an annual decrease of 9%.

MEPS said that "Only four of the major producing countries in the world will post increases, year on year, for crude steel manufacturing in 2009. A substantial rise in Iran and modest improvement in Saudi Arabia will lead to gains in the Middle East. Substantially higher activity in the Chinese steel sector and steady progress in India will result in total Asian supply rising by in excess of 3%.

It added that "We predict output gains across all regions over the next two years. Double digit percentage increases are anticipated for most of the industrialized nations in 2010 as they partly recover from large reductions in the previous twelve month period. More modest rises are envisaged for the developing countries in the CIS, Africa, South America, Middle East and Asia."

The 2009 steel output in the EU 27 will be close to 138 million tonnes, down by 30% below the outturn in the previous year. Double digit reductions in steel manufacturing took place in all the nineteen producing member states. The mills in Belgium, Bulgaria and Sweden took the biggest hit with almost 50 percent decreases in output. Greece, Luxembourg and Slovakia were the least badly affected.

Raw steel production in the rest of Western Europe in 2009 will be approximately 29 million tonnes. This represents a reduction of almost 9% on the result in the previous year. The outturn for blast furnace iron making will be marginally down, due to new capacity installed recently in Turkey.

Crude steelmaking in the CIS showed a mini revival in the second half of 2009 but still recorded a figure of below 100 million tonnes for the first time since 2001. The year on year decrease was close to 15 percent. Local demand in most countries of the region has started to pick up. We forecast blast furnace iron and steel production in 2010 rising to 77.6 and 100.5 million tonnes, respectively, an increase of approximately 8% over the previous year’s figure.

The global recession had a major impact on the steel sector in the NAFTA region in 2009. Output fell by one third, year on year. The integrated mills took the biggest hit. Blast furnace iron production fell by approximately 40% across the region.

South American steel production declined by just above 20% YoY in 2009. Both domestic and export demand fell dramatically as the global economic recession set in. On a positive note, output started to recover in the second half of the year. Further gains are predicted to occur in 2010 and 2011 in both iron and steelmaking. In fact, we forecast a new record high level of steelmaking in the region in the latter year.

Total African steelmaking in 2009 fell by approximately 20% YoY. However, we predict a solid recovery in 2010 but it will be insufficient to reach the outturns in the period 2006 to 2008. In fact, it is likely to be several years before new record high levels are achieved.

Middle East steel production continued to prosper in 2009, despite the global economic crisis. Output will be an all time high at well in excess of 17 million tonnes. Further solid growth will occur in the following two years as new plants come on stream. Steelmaking should climb to near 20 million tonnes in 2011.

Crude steel output in Asia in 2009 was approximately 3% above the figure reported in the previous year. At over 790 million tonnes, this is a new record output and represents eleven consecutive years of growth. New all time peak values are forecast for 2010 and 2011. Most of the expansion of steelmaking has been undertaken, via the blast furnace oxygen steelmaking route. Consequently, pig iron production has also increased to reach a figure of approaching 675 million tonnes in 2009. This pattern will extend well into the future.

(Source from MEPS - World Steel Outlook)