World steel production and demand growth have slowed in 2011. Production reached 1,514 million tonnes on an annualized basis in the first three quarters of the current year, an increase of just 9% from the same period in 2010, against the 12.5% increase originally forecast for FY12.

World finished steel consumption increased by 7% in the first three quarters of this year, versus the 15% growth observed in 2010.

The slowdown in global steel demand this year was driven by moderating industrial production and weak construction sector growth, noted the Organisation for Economic Co-operation and Development Steel Committee, at a its recent meeting.

World industrial production grew by around 6 per cent year-on-year in the first three quarters of 2011 following a moderating trend in growth since mid-2010.

The slowing trend is evident especially in advanced economies but also in emerging markets, the committee observed. Signaling the growing uncertainty over industry outlook, the committee advocated that policies to support open markets for raw materials are of mutual interest and will be key to fighting uncertainty over future developments.

Despite increasing demand for steelmaking raw materials, no overall physical shortage is foreseen, though short-term and medium-term shortages are still possible due to unexpected demand increase, the committee noted.

In a related workshop on steelmaking raw materials, the growing role of China, India and other emerging economies in global demand for raw materials, such as iron ore, was emphasized.

According to the World Steel Association's short-range outlook released in October 2011, globally, finished steel use is expected to increase by 6.5% in 2011 and then by 5.4% in 2012, with demand in emerging economies increasing more than the world average.

Despite uncertainties in the demand outlook for steel, steelmaking capacity continues to grow out of line with demand, raising concerns about supply and demand imbalances, the report pointed out.

(Sourced from BL)