Global economic outlook and steel demand trends. Eldar Askerov, April 2012

Transcription

1 Global economic outlook and steel demand trends Eldar Askerov, April 212

2 worldsteel what is our role? worldsteel provides global leadership on all major strategic issues affecting the industry worldsteel promotes steel and the steel industry steel industry: a vital part of society worldsteel assists its members to develop the market for steel and to improve their performance managing major projects such as FutureSteelVehicle Living Steel India Steel Vision 22 and China Steel Vision 22 worldsteel safety and health principles 2

3 Key facts worldsteel today 146 Members: 65 Regular (production > 1.8 Mt) 31 Associate (production < 1.8 Mt) 5 Affiliated (Regional and National Associations and Steel Research Institutes) 17 of the world s 2 largest companies are members Membership HQs are located in over 5 countries worldsteel headquarters in Brussels, second office in Beijing Any producer with more than 2 million short tons (1.8 metric) of crude steel production can become a regular member of worldsteel 3

4 Contents Long term steel market trends Global demand for steel in Post-crisis steel demand recovery EU, US Emerging markets Conclusions 4

5 Long term steel market trends 5

6 Steel is a cornerstone and key driver for the world s economy. 6

7 Global growth in steel production is linked to human development World crude steel production, Years Mt , , Source: worldsteel ,527

8 Steel a key driver of the world s economy World crude steel production has increased from 851 megatonnes (Mt) in 21 to 1,527 Mt in 211. (28.3 Mt in 19). The industry directly employs 2 million people worldwide, with a further 2 million contractors and 4 million in supporting industries. Considering steel s position as the key product supplier to industries such as automotive, construction, transport, power and machine goods then using a multiplier of 25:1 the steel industry is at the source of employment for more than 5 million people. World average steel use per capita has steadily increased from 15 kg in 21 to 22 kg in 21. India, Brazil, Korea and Turkey have all entered the top 1 steel producers list in the last 4 years. 8

9 Regional steel demand breakdown in Regional structure of steel demand has been changing continuously along with: Regional economic growth trends Evolution of global manufacturing base through creation and relocation of industries Mt 14 Apparent crude steel use in South America Africa and Middle East China Other Europe Asia and Oceania excl China North America former USSR EU Source: worldsteel, SSY 9

10 Regional share in world steel demand Developed Economies Emerging & Developing Economies 58.4% 41.6% 41.7% 58.3% 28.7% 71.3% Source: worldsteel, SRO 1

11 China Vietnam Indonesia Morocco India South Korea Algeria Singapore Thailand Spain Canada Argentina Iran Russia Saudi Arabia Philippines Malaysia Japan Poland Italy South Africa Ukraine Egypt Turkey Brazil EU 15 Germany United States United Kingdom Investments: steel demand driver in developing world Urbanisation and development of manufacturing base boost steel demand % Fixed investments in , % to GDP Thailand China Vietnam 3 % Fixed investments, % to GDP 25 2 India Indonesia Forecast Source: Global Insight 11

12 Developing world: strong fundamentals for growth Strong upward population trend with high share of working age population Strong needs for infrastructure and industries development Population, million Urbanisation, % GDP per capita, PPP$* Steel use per capita, kg Brazil ,961 14, Mexico ,224 16, Turkey ,39 16, Indonesia ,94 6,16 37 Thailand ,648 1, Vietnam ,981 4, India 1,241 1, ,195 5, China 1,347 1, ,53 14, Source: Global Insight, worldsteel *real 25 PPP$ 12

13 Post-crisis steel demand recovery 13

14 Global steel demand growth in Steel demand landscape has been changed by global economic crisis Two-speed world: emerging & developing economies vs developed Global steel demand, ASU finished steel % Source: worldsteel World, mmt Developed Economies, y-o-y % growth Emerging&Developing Economies, y-o-y % growth Mt 1,4 1,3 1,2 1,1 1,

15 Regional summary at a glance Apparent steel use finished steel, Index (27=1) World CIS Africa EU-27 NAFTA Middle East Other Europe Central&South America Asia&Oceania Source: worldsteel, SRO 15

16 Global economic outlook IMF GDP Forecast Revisions for Advanced Economies IMF GDP Forecast Revisions for Emerging and Developing Economies Oct-1 Jan-11 Apr-11 Jun-11 Sep-11 Jan-12 Apr-12 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12 Source: IMF 16

17 In 212 the world economy is projected to expand by 3.5% (IMF) Downside risks for the forecast: Sovereign debt crisis in euro zone Subdued growth as a result of austerity measures Significant slowdown in growth in emerging economies China s hard landing World GDP, y-o-y, % Industrial production, y-o-y, % % Forecast % 15 1 Forecast Q6 3Q6 Source: Global Insight 1Q7 3Q7 1Q8 3Q8 1Q9 3Q9 1Q1 3Q1 1Q11 3Q11 1Q12 3Q12 1Q13 World Advanced Economies Emerging Markets 3Q13 1Q14 3Q Q6 3Q6 1Q7 3Q7 1Q8 3Q8 1Q9 3Q9 1Q1 3Q1 1Q11 3Q11 1Q12 3Q12 1Q13 World Advanced Economies Emerging Markets 3Q13 1Q14 3Q14

18 EU steel market: thorny way to recovery Two-speed euro zone: North and South Europe Germany: positive economic outlook, strong growth in construction, automotive Spain, Italy: the second wave of crisis EU: Strong rebound in automotive sector EU countries: steel demand, Mt mmt Source: worldsteel, Oxford Economics Germany Italy France Spain UK EU 15: steel using sectors growth, % Automotive Metal Goods Electrical engineering Mechanical engineering Transportation (less automotive)

19 Is the US economy coming back on growth path? Latest data gives some hope that the US is recovering steadily US construction: housing starts seems to rise but still has a long way to go Strong rebound in automotive industry US: steel using sectors growth, % US: Housing units started and houses sold, % % % Fabricated metal products Mechanical machinery -2 Electrical and optical equipment Motor vehicles Source: CEIC, Oxford economics Jan- Jul- Jan-1 Jul-1 Jan-2 Jul-2 Jan-3 Jul-3 Jan-4 Jul-4 Jan-5 Jul-5 Jan-6 Jul-6 Jan-7 New 1 Family Houses Sold: sa: Annual Rate Jul-7 Jan-8 Jul-8 Jan-9 Jul-9 Jan-1 Jul-1 Jan-11 Jul-11 Jan-12 Private Housing Units Started: saar: Total 1.5

20 ASEAN: positive perspectives for steel demand Indonesia: slight slowdown in 212 after impressive growth in 211 Thailand: after floods recovery Region has strong fundamentals for steel demand growth Infrastructure improvement ASEAN: Industrial production growth, % 2 % Indonesia: steel using sectors growth, % % Thailand: steel using sectors 25= Manufacturing Mechanical machinery Fabricated Metal Goods Motor vehicles -3 1Q28 3Q28 1Q29 3Q29 1Q21 3Q21 1Q211 3Q211 1Q212 3Q Industrial production Manufacturing Motor vehicles Indonesia Thailand Vietnam Malaisia ASEAN 1Q26 3Q26 1Q27 3Q27 1Q28 3Q28 1Q29 3Q29 1Q21 3Q21 1Q211 3Q211 1Q212 3Q212 Source: Global Insight, Oxford Economics 2

21 India Current deceleration due to anti inflationary policy weak external demand Long term: economy needs modern infrastructure India and China: Industrial production growth, % % 2 China India Source: CEIC, Global Insight India: Steel using sectors 24-5= Apr-5 Aug-5 21 IP: Manufacturing IP: Capital Goods Dec-5 Apr-6 Aug-6 Dec-6 Apr-7 Aug-7 Dec-7 Apr-8 Aug-8 Dec-8 Apr-9 Aug-9 Dec-9 Apr-1 Aug-1 IP: Consumer Goods: Durables Dec-1 Apr-11 Aug-11 Dec-11

22 China: deceleration of growth in 212 Gradual slowdown because of anti inflationary policy and weaker external demand Cooling real estate sector YTD Growth Of Auto & Machinery Sectors Production 5% YTD Growth Of Construction Industry 1% 8% 6% 4% 47.5% 47.7% 4% 3% 2% 33.5% 38.2% 26.6% 35.5% 27.8% 2% % -2% 9.8% -1.8% -5.7% 1% % 14.2% -4% Jan-8 Apr Jul Oct Jan-9 Apr Jul Oct Jan-1 Apr Jul Oct Jan-11 Apr Jul Oct Jan-12 Automobile Civil metal vessels AC electromotor Household refrigerator Room air condioner Household washing machine -1% Jan-8 Mar May Jul Sept Nov Jan-9 Mar May Jul Sept Nov Jan-1 Mar May Jul Sept Nov Jan-11 Mar May Jul Sept Nov Jan-12 FAI in real estate Floor space under construction Cement output Source: worldsteel 22

23 PPP$ Shanghai Tianjin Beijing Jiangsu Zhejiang Guangdong Shandong Inner Mongolia Liaoning Fujian Jilin Heilongjiang Hebei National Total Hubei Chongqing Henan Xinjiang Shaanxi Shanxi Hainan Hunan Qinghai Ningxia Sichuan Guangxi Anhui Jiangxi Tibet Yunnan Gansu Guizhou China: multi-speed growth in provinces China: provincial GDP per capita Heilongjiang Jilin Xinjiang Xizang Gansu Qinghai Nei Mongol Sichuan Yunnan Ningxia Shaanxi Guizhou Hebei Shanxi Henan Hubei Hunan Guangxi Liaoning Shandong Anhui Jiangxi Fujian Guangdong Jiangsu Tianjin Beijing Zhejiang Shanghai Taiwan Hainan Source: Global Insight 23 Level of development according to GDP per capita Less developed Developed

24 Conclusions Regional structure of global steel demand has been changing over time due to many different factors including competitiveness of the local manufacturing, construction activity, population trends. Despite the deceleration of growth in the post crisis period developing economies have strong fundamentals for steel demand growth. Global steel demand has maintained relatively stable recovery momentum so far despite uncertainties and volatilities in the global economy. Evolution of the euro zone crisis and healthy growth of the emerging economies, especially of China, are critical to current trends. 24

25 Steel touches every aspect of our lives. No other material has the same unique combination of strength, formability and versatility. 25

26 worldsteel.org April 3,