Global steel consumption 'may slow down in 2005'

World steel consumption growth may slow down in calendar year 2005 contrary to expectations of a spiking steel demand, says the International Iron & Steel Institute (IISI).

The institute has estimated a growth of 3.9-5 per cent in the global steel consumption for 2005, against the current year's growth rate of 7.6 per cent.

A slowdown in China's steel growth from 13.1 per cent this year, to 6.5 -10.3 per cent in 2005, along with a declining in demand growth in Central & South America, which is estimated to fall to 5.6 per cent in 2005, from this year's growth rate of 14 per cent.

An international steel analyst said, "The tightening measures implemented by the Chinese government are likely to result in a slowdown of the growth of steel consumption in China. Since China is the leading consumer of steel, a 3 per cent reduction will have a significant impact on world steel growth rate." 
 

Consumption character Consumption of steel, million tonne
	2003	2004 [E]	2005 [F]
EU-25	158.8	164.1	167.9
Other Europe	23.6	25.1	26.8
CIS countries	44.2	45.4	47.8
Nafta nations	133.5	145.8	150.2
Central & South America	28.2	32.4	34.2
South Korea	45.4	47.4	48.4
India	30.3	32.3	34.5
China	232.4	263	280.0-290.0
Other Asia	70.4	72.8	74.5
World	882.6	950.1	987.8-997.8
World Excluding China	650.2	687.1	707.8
Source: International Iron & Steel Institute

China will consume 263 million tonne of steel this year, 30 million tonne more against consumption of 232 million tonne in 2003. In spite of a cooling down, the Chinese steel demand will grow to around 280-290 million tonne in the next year.

Meanwhile, the growth of steel demand in 2005 in India will remain at 6.8 per cent, similar to the current year's growth rate of 6.6 per cent, at 33 million tonne.

World steel consumption is expected to touch a billion tonne this year, around 15 million tonne ahead of IISI estimates, reflecting a higher growth rate than 7.6 per cent. It is unlikely that the global industry will be able to sustain a similar growth rate for the next year," said an industry expert.

Steel consumption in Central and South America is expected to be at 32 million tonne in the current year, while demand in the NAFTA countries will be at 146 million tonne, a growth of 9.2 per cent over last year. Growth in the NAFTA region is estimated to come down to 3 per cent in 2005, says IISI.