According to forecasts of World Steel Dynamics, the world steel demand will increase by 13.7% in 2010, 5.8% in 2011, and 4.6% in 2012. In the next few years, some new conditions and changes in the world economy will affect the development of the world steel industry and downstream steel demand.
After the financial crisis, the world steel industry began to recover slowly. According to World Steel Dynamics (WSD) forecast, world steel demand will increase by 13.7% in 2010, 5.8% in 2011, and 4.6% in 2012. In the next few years, some new conditions and new changes in the world economy will affect the development of the world steel industry and the downstream steel demand. At the same time, an important uncertainty factor in the development of the world economy is that the governments of various countries are taking loose measures. Whether monetary policy stimulates economic growth can continue to have influence.
The assessment of development and changes in the world steel industry from 2009 to 2012 is the year that except China, the reduction of steel stocks in other parts of the world was completed in mid-2009, and the apparent consumption of steel in China increased in 2009. More than 20%. In other parts of the world except China, by the end of 2009 steel stocks had dropped to very low levels. In 2009, except for some low-cost steel companies in China, Russia, India, and Brazil that made profits, many steel companies were unprofitable. In 2009, world crude steel output decreased by 7.3% to 1.23 billion tons.
In 2010, in addition to China, steel stocks in the rest of the world increased again, and steel demand picked up. By May 2010, the delivery volume and price of steel products had rebounded sharply. After that, the price of steel products slowly declined. In 2010, China's economy continued to show strong growth. Similarly, steel prices and demand rose, but in the second half of 2010, Chinese authorities continued to implement tightening monetary policies in the real estate industry, and domestic steel demand in China entered a stable stage. In addition to China, steel users in other regions of the world have increased their financing and increased their steel inventories because they are optimistic about the economic outlook. Crude steel production in the world in 2010 is expected to increase by 17.2% to a record 1.44 billion tons.
In 2011, it was the year in which the demand for steel in the rest of the world, except China, continued to grow. This reflects the overall synchronous recovery of the world economy. On the contrary, China's investment in fixed assets declined, leading to a slowdown in the growth of steel demand. From the rest of the world, steel consumption-intensive capital expenditures and the construction sector are also starting to rebound strongly. In 2011, world crude steel production will increase by 5.4% to 1.52 billion tons.
In 2012, it is expected that the growth rate of China's fixed asset investment will continue to slow down and China's economic growth will also slow down. However, the economy of other developing countries will continue to maintain growth and the economy of developed countries will continue to pick up from 2011. From the perspective of the entire world economy, it will still maintain a certain growth rate. In 2012, world crude steel production will still increase by 4.7% to 1.59 billion tons.
Due to the reduction in credit supply in 2009, the decline in market confidence and the bleak profit outlook, the construction industry sector and the machinery and equipment manufacturing market with relatively long investment start-up periods have been severely and adversely affected. From the perspective of steel demand, the demand for steel in the high-end consumer durables market accounts for 20% of the total demand, the demand for steel in the construction industry sector accounts for 40%, and the demand for steel in the machinery and equipment manufacturing market accounts for 40%. Therefore, the above market recovery usually lags behind the economic recovery, so that the strong rebound in steel demand in the rest of the world except China will only appear after 2010.
According to the purchasing power parity theory, half of the world’s GDP is from developing countries, which is very favorable to the development prospects of world steel demand. The rate of fixed asset investment in developing countries (ie, the ratio of fixed asset investment to GDP) is high, and the demand for steel products is also large. These developing countries have a high national savings rate and a high rate of investment in fixed assets. Compared with developed countries, they contribute more to the growth rate of world GDP, and thus contribute more to the growth in world steel demand.
In the next ten years, some active driving factors in the development of the world steel industry will be analyzed. At present, the economic growth rate of developing countries is much faster than that of developed countries. China's economic growth model requires a high growth rate in fixed asset investment. China’s economic growth model, which relied mainly on the growth rate of high investment in fixed assets, was also promoted by other countries and regions such as India, the Middle East, the Commonwealth of Independent States, and South America, and implemented it.
Steel consumption intensity, or steel consumption per unit of GDP, remains high in developing countries. The reason is that developing countries need to invest heavily in infrastructure, and use new and high technologies to build new factories in oil and gas drilling. Increased investment in the development of oil, oil transportation, and new energy sources all require the consumption of large amounts of steel.
Recently, World Steel Dynamics analyzed and evaluated world steel supply and demand from 2010 to 2012. From the middle of 2009, the world economy has turned positive and has developed in a positive direction. Moreover, the overwhelming majority of people are more optimistic about the outlook for the world economy in the next five years. The reason is that the severity of the economic recession has eased and some important problems that have already existed. Will be gradually resolved, such as high oil prices and the high risk of the global financial system have been properly resolved. In spite of this, the rebound in the actual steel demand in the world lags behind the rebound of the entire economy. The reason is that fluctuations in actual steel demand are closely related to the fixed asset investment cycle in various regions.
In the third quarter of 2010, the world’s steel demand will rebound back to the highest peak level reached in the second quarter of 2008, of which China is the main contributor, and other developing countries are another factor driving the growth in steel demand. After the beginning of 2012, the peak level of steel demand will be reached. In 2008, world crude steel output fell by 1.4%, and steel demand increased by 2%. In 2009, world crude steel output fell again by 7.3% to 1.23 billion tons; steel demand decreased by 7.1% to 1.25 billion tons.
Looking forward to the development prospects in the next three years, world crude steel output will rebound by 17.2% in 2010, and steel demand will increase by 13.7% to 1.42 billion t. In 2011, the world crude steel output will further increase by 5.4% to 1.52 billion. t. The demand for steel will increase by 5.8% to 1.50 billion t. In 2012, the world crude steel output will increase by 4.7% to 1.59 billion t. The demand for steel will increase by 4.6% to 1.57 billion t. What needs to be pointed out here is that in the second quarter of 2008, the world's crude steel production and steel demand reached 1.46 billion tons and 1.43 billion tons respectively, which is the highest level in history.
The prediction of changes in world steel demand and Chinese steel demand from 2012 to 2020 In the coming years, the world economy will continue to grow. The reason is that the information revolution will have an important impact, and the information revolution will not only promote world economic growth. It will also suppress inflation because the information revolution can improve the competitiveness of most industrial sectors. Its promotion of a more rapid growth of the world economy lies in the fact that the information revolution can cut costs and uncover many of the unused production capacity in the past, thus promoting the commercialization of new technologies and reducing the input costs of new plants and increasing price competitiveness. From 2003 to 2007, the world economy maintained rapid growth. The average growth rate of world GDP in 2003 was 3.6%, 4.9% in 2004, 4.5% in 2005, 5.1% in 2006, and 5.2% in 2007. In 2008, affected by the economic crisis, the average growth rate of world GDP fell to 3.0%. In 2009, the world economy entered a recession, and the average growth rate of world GDP was -0.6%. The average growth rate of world GDP in 2010 and 2011 is expected to reach 4.2% and 4.3%, respectively.
If the world economy is to maintain rapid growth, investment in fixed assets will need to play a greater role. Since 2002, the increase in investment in fixed assets has become an important reason for the growth of GDP. If the fixed asset investment rate remains at a high level in China, the economy in the rest of the world continues to maintain its growth momentum, and the economic growth in the developed countries has recovered, then in the next decade, the prospects for world steel demand growth will be promising. At the same time, the national savings rate is an important factor in determining the upper limit of the fixed asset investment rate. If India's steel demand growth rate in the next 10 years has reached the growth rate of China's steel demand in the past 10 years, then its national savings rate needs to maintain its growth momentum. At present, the national saving rate in India (that is, the proportion of national savings balance in GDP) is about 32%, while in China it is 51%.
Changes in world steel demand from 2012 to 2020 In the period from 2012 to 2020, the average annual growth rate of China's steel demand is about 3% to 4%. The steel demand per unit of GDP, that is, the intensity of steel consumption, will likely reach the highest peak in China in the next few years. As the intensity of China's steel consumption increases, this will lead to a decline in the rate of investment in fixed assets.
In addition to China, the demand for steel in other developing countries in the world will grow at an average annual rate of about 2% to 3% between 2012 and 2020. The demand for steel in India, South America and the Middle East will increase significantly during this period. For the Middle East region, the oil price reached US$125 per barrel, which has the potential to increase steel demand substantially. It is still controversial whether Russia’s steel demand is likely to increase. The reason is that the Russian population is decreasing.
From 2012 to 2020, the average annual growth rate of steel demand in developed countries is about 2%. The national savings rate of developed countries is low, and the investment rate of fixed assets is also quite low. For example, the U.S. fixed asset investment rate is only 11% to 12%.
From 2012 to 2020, the weighted average annual growth rate of world steel demand is about 2.9%. For a long time in the future, World Steel Dynamics will adopt an annual growth rate of 3% as the predicted annual growth rate of steel demand in the world. If the world average steel demand growth rate is 3% in the next 10 years, then by 2020 the world steel production will need to increase by 40% from 2010 to meet the annual growth rate of this steel demand.
Recent Analysis of China's Main Factors Contributing to the Increase in Demand for Steel Products In the past two years, the Chinese economy has maintained rapid growth, and the average annual steel demand growth has exceeded the world average growth rate. The reason is that China's fixed asset investment as a percentage of GDP, which is a high rate of investment in fixed assets, was 48% in 2009 and 49% in 2010, compared with only 38% in 2002. By 2012, China's fixed asset investment rate will increase slightly, but the fixed asset investment rate is already approaching the peak level. The reason is that China’s public welfare expenditures such as medical expenses, pension expenditures, and household consumption expenditure account for the two major expenses. The proportion of GDP will increase. In 2009, China’s investment in fixed assets increased by 24%, in 2010 it was around 15%, in 2011 it was 14%, and in 2012 it is estimated at 12% or less. If China's household consumption expenditures increase as a proportion of GDP, it means that the balance of savings in China has fallen, which is an important development change.
After the financial crisis, the world steel industry began to recover slowly. According to World Steel Dynamics (WSD) forecast, world steel demand will increase by 13.7% in 2010, 5.8% in 2011, and 4.6% in 2012. In the next few years, some new conditions and new changes in the world economy will affect the development of the world steel industry and the downstream steel demand. At the same time, an important uncertainty factor in the development of the world economy is that the governments of various countries are taking loose measures. Whether monetary policy stimulates economic growth can continue to have influence.
The assessment of development and changes in the world steel industry from 2009 to 2012 is the year that except China, the reduction of steel stocks in other parts of the world was completed in mid-2009, and the apparent consumption of steel in China increased in 2009. More than 20%. In other parts of the world except China, by the end of 2009 steel stocks had dropped to very low levels. In 2009, except for some low-cost steel companies in China, Russia, India, and Brazil that made profits, many steel companies were unprofitable. In 2009, world crude steel output decreased by 7.3% to 1.23 billion tons.
In 2010, in addition to China, steel stocks in the rest of the world increased again, and steel demand picked up. By May 2010, the delivery volume and price of steel products had rebounded sharply. After that, the price of steel products slowly declined. In 2010, China's economy continued to show strong growth. Similarly, steel prices and demand rose, but in the second half of 2010, Chinese authorities continued to implement tightening monetary policies in the real estate industry, and domestic steel demand in China entered a stable stage. In addition to China, steel users in other regions of the world have increased their financing and increased their steel inventories because they are optimistic about the economic outlook. Crude steel production in the world in 2010 is expected to increase by 17.2% to a record 1.44 billion tons.
In 2011, it was the year in which the demand for steel in the rest of the world, except China, continued to grow. This reflects the overall synchronous recovery of the world economy. On the contrary, China's investment in fixed assets declined, leading to a slowdown in the growth of steel demand. From the rest of the world, steel consumption-intensive capital expenditures and the construction sector are also starting to rebound strongly. In 2011, world crude steel production will increase by 5.4% to 1.52 billion tons.
In 2012, it is expected that the growth rate of China's fixed asset investment will continue to slow down and China's economic growth will also slow down. However, the economy of other developing countries will continue to maintain growth and the economy of developed countries will continue to pick up from 2011. From the perspective of the entire world economy, it will still maintain a certain growth rate. In 2012, world crude steel production will still increase by 4.7% to 1.59 billion tons.
Due to the reduction in credit supply in 2009, the decline in market confidence and the bleak profit outlook, the construction industry sector and the machinery and equipment manufacturing market with relatively long investment start-up periods have been severely and adversely affected. From the perspective of steel demand, the demand for steel in the high-end consumer durables market accounts for 20% of the total demand, the demand for steel in the construction industry sector accounts for 40%, and the demand for steel in the machinery and equipment manufacturing market accounts for 40%. Therefore, the above market recovery usually lags behind the economic recovery, so that the strong rebound in steel demand in the rest of the world except China will only appear after 2010.
According to the purchasing power parity theory, half of the world’s GDP is from developing countries, which is very favorable to the development prospects of world steel demand. The rate of fixed asset investment in developing countries (ie, the ratio of fixed asset investment to GDP) is high, and the demand for steel products is also large. These developing countries have a high national savings rate and a high rate of investment in fixed assets. Compared with developed countries, they contribute more to the growth rate of world GDP, and thus contribute more to the growth in world steel demand.
In the next ten years, some active driving factors in the development of the world steel industry will be analyzed. At present, the economic growth rate of developing countries is much faster than that of developed countries. China's economic growth model requires a high growth rate in fixed asset investment. China’s economic growth model, which relied mainly on the growth rate of high investment in fixed assets, was also promoted by other countries and regions such as India, the Middle East, the Commonwealth of Independent States, and South America, and implemented it.
Steel consumption intensity, or steel consumption per unit of GDP, remains high in developing countries. The reason is that developing countries need to invest heavily in infrastructure, and use new and high technologies to build new factories in oil and gas drilling. Increased investment in the development of oil, oil transportation, and new energy sources all require the consumption of large amounts of steel.
Recently, World Steel Dynamics analyzed and evaluated world steel supply and demand from 2010 to 2012. From the middle of 2009, the world economy has turned positive and has developed in a positive direction. Moreover, the overwhelming majority of people are more optimistic about the outlook for the world economy in the next five years. The reason is that the severity of the economic recession has eased and some important problems that have already existed. Will be gradually resolved, such as high oil prices and the high risk of the global financial system have been properly resolved. In spite of this, the rebound in the actual steel demand in the world lags behind the rebound of the entire economy. The reason is that fluctuations in actual steel demand are closely related to the fixed asset investment cycle in various regions.
In the third quarter of 2010, the world’s steel demand will rebound back to the highest peak level reached in the second quarter of 2008, of which China is the main contributor, and other developing countries are another factor driving the growth in steel demand. After the beginning of 2012, the peak level of steel demand will be reached. In 2008, world crude steel output fell by 1.4%, and steel demand increased by 2%. In 2009, world crude steel output fell again by 7.3% to 1.23 billion tons; steel demand decreased by 7.1% to 1.25 billion tons.
Looking forward to the development prospects in the next three years, world crude steel output will rebound by 17.2% in 2010, and steel demand will increase by 13.7% to 1.42 billion t. In 2011, the world crude steel output will further increase by 5.4% to 1.52 billion. t. The demand for steel will increase by 5.8% to 1.50 billion t. In 2012, the world crude steel output will increase by 4.7% to 1.59 billion t. The demand for steel will increase by 4.6% to 1.57 billion t. What needs to be pointed out here is that in the second quarter of 2008, the world's crude steel production and steel demand reached 1.46 billion tons and 1.43 billion tons respectively, which is the highest level in history.
The prediction of changes in world steel demand and Chinese steel demand from 2012 to 2020 In the coming years, the world economy will continue to grow. The reason is that the information revolution will have an important impact, and the information revolution will not only promote world economic growth. It will also suppress inflation because the information revolution can improve the competitiveness of most industrial sectors. Its promotion of a more rapid growth of the world economy lies in the fact that the information revolution can cut costs and uncover many of the unused production capacity in the past, thus promoting the commercialization of new technologies and reducing the input costs of new plants and increasing price competitiveness. From 2003 to 2007, the world economy maintained rapid growth. The average growth rate of world GDP in 2003 was 3.6%, 4.9% in 2004, 4.5% in 2005, 5.1% in 2006, and 5.2% in 2007. In 2008, affected by the economic crisis, the average growth rate of world GDP fell to 3.0%. In 2009, the world economy entered a recession, and the average growth rate of world GDP was -0.6%. The average growth rate of world GDP in 2010 and 2011 is expected to reach 4.2% and 4.3%, respectively.
If the world economy is to maintain rapid growth, investment in fixed assets will need to play a greater role. Since 2002, the increase in investment in fixed assets has become an important reason for the growth of GDP. If the fixed asset investment rate remains at a high level in China, the economy in the rest of the world continues to maintain its growth momentum, and the economic growth in the developed countries has recovered, then in the next decade, the prospects for world steel demand growth will be promising. At the same time, the national savings rate is an important factor in determining the upper limit of the fixed asset investment rate. If India's steel demand growth rate in the next 10 years has reached the growth rate of China's steel demand in the past 10 years, then its national savings rate needs to maintain its growth momentum. At present, the national saving rate in India (that is, the proportion of national savings balance in GDP) is about 32%, while in China it is 51%.
Changes in world steel demand from 2012 to 2020 In the period from 2012 to 2020, the average annual growth rate of China's steel demand is about 3% to 4%. The steel demand per unit of GDP, that is, the intensity of steel consumption, will likely reach the highest peak in China in the next few years. As the intensity of China's steel consumption increases, this will lead to a decline in the rate of investment in fixed assets.
In addition to China, the demand for steel in other developing countries in the world will grow at an average annual rate of about 2% to 3% between 2012 and 2020. The demand for steel in India, South America and the Middle East will increase significantly during this period. For the Middle East region, the oil price reached US$125 per barrel, which has the potential to increase steel demand substantially. It is still controversial whether Russia’s steel demand is likely to increase. The reason is that the Russian population is decreasing.
From 2012 to 2020, the average annual growth rate of steel demand in developed countries is about 2%. The national savings rate of developed countries is low, and the investment rate of fixed assets is also quite low. For example, the U.S. fixed asset investment rate is only 11% to 12%.
From 2012 to 2020, the weighted average annual growth rate of world steel demand is about 2.9%. For a long time in the future, World Steel Dynamics will adopt an annual growth rate of 3% as the predicted annual growth rate of steel demand in the world. If the world average steel demand growth rate is 3% in the next 10 years, then by 2020 the world steel production will need to increase by 40% from 2010 to meet the annual growth rate of this steel demand.
Recent Analysis of China's Main Factors Contributing to the Increase in Demand for Steel Products In the past two years, the Chinese economy has maintained rapid growth, and the average annual steel demand growth has exceeded the world average growth rate. The reason is that China's fixed asset investment as a percentage of GDP, which is a high rate of investment in fixed assets, was 48% in 2009 and 49% in 2010, compared with only 38% in 2002. By 2012, China's fixed asset investment rate will increase slightly, but the fixed asset investment rate is already approaching the peak level. The reason is that China’s public welfare expenditures such as medical expenses, pension expenditures, and household consumption expenditure account for the two major expenses. The proportion of GDP will increase. In 2009, China’s investment in fixed assets increased by 24%, in 2010 it was around 15%, in 2011 it was 14%, and in 2012 it is estimated at 12% or less. If China's household consumption expenditures increase as a proportion of GDP, it means that the balance of savings in China has fallen, which is an important development change.
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