World steel demand is expected to grow strongly this year, despite concerns about the performance of the US and European Union economies, according to the industry's world body.
Demand from the Bric countries of Brazil, Russia, India and China and other emerging economies will push demand up to almost 1.3bn metric tonnes, a rise of 6.7% over 2007, the International Iron and Steel Institute (IISI ) said in its latest forecast.
Growth in 2009 is set to rise by about 6.3%, according to the institute, which represents 180 steel makers across the world.
Ku-Taek Lee, the IISI chairman, said: "The underlying assumption behind this forecast is that, although some weakening in the US and EU economies is expected, demand for steel will remain healthy thanks in part to the emerging markets, which will maintain their dynamism."
The buoyant outlook from the IISI contrasted with a more sombre approach from investors in the Far East. Shares in several of the region's steel makers fell yesterday after Posco of South Korea, the world's fourth largest producer, said it was not planning to raise prices unless raw material costs soared.
The institute said it expected demand from the Bric countries to rise by just over 11% this year, and by 10.3% in 2009, but rising demand in other emerging economies would narrow the gap in growth rates between the Bric countries and the rest of the world.
Apparent steel use, which includes inventories, is expected to rise by 11.5% in China, taking its share of world steel consumption to 35% this year.
Luo Bingsheng, deputy chairman of China Iron & Steel Association, last week said that China's crude steel output was estimated to reach up to 540m tonnes in 2008, an increase of about 50m tonnes on last year.
Luo also predicted that the domestic apparent consumption of crude steel was likely to grow about 11%, slightly lower than the 11.87% in 2007.
In the EU, steel use is expected to rise by 1.6% this year and 2.3% in 2009. Consumption in the North American Free Trade Agreement countries — the US, Canada and Mexico — fell sharply last year, but the IISI said it expected steel consumption to grow by 1.9% this year and 1% in 2009 despite the economic uncertainties.
The world steel industry has boomed in recent years on the back of growing demand from industrialising nations. It is the second biggest industry, after oil, in terms of commodities.
The boom has driven up the price of steel, and the price of iron ore and nickel, which is used in the manufacture of stainless steel, has also increased.
