At the 18th SteelOrbis Steel Conference “New Horizons in Steel Markets” held today, November 28, in Istanbul with the participation of almost 600 participants, Dr. Barış Çiftçi, director of industry analysis at the World Steel Association (worldsteel), evaluated the current situation in the global steel industry.
Mr. Çiftçi stated that the global industry has left behind a difficult year, and that growth is expected in the coming period. In particular, the higher production costs caused by Russia’s invasion of Ukraine caused production to move to an entirely different level. Emphasizing that the automotive industry recorded double-digit growth this year for the first time in a long time, the worldsteel official said that the start of the recovery in the supply chains supported the growth in the industry. He highlighted that a decline in inflation and the cycle of unabated increases in interest rates coming to an end will be welcomed in the markets. Mr. Çiftçi also said that the Chinese residential sector, which accounts for 30 percent of the steel demand in the country, has stabilized and that this stability is expected to continue in the first half of next year.
Sharing forecasts regarding global steel demand, the worldsteel official stated that, even though China is expected to grow this year, the latest figures show that the growth rate has weakened somewhat, though positive sentiments are still seen. According to the data shared by Çiftçi, global steel demand is anticipated to increase by 1.9 percent to 1.81 billion mt this year and by 1.9 percent to 1.85 billion mt next year. Yet, steel demand in the EU is estimated to rise to only 75.0 percent of the level recorded in 2007. Even though Russia’s domestic steel demand was expected to decrease due to sanctions, with the help of state-backed investments growth is forecast for the country. However, steel demand in the US, Mexico and Canada taken together is foreseen to contract by one percent.
Comparing 2019, just before the start of the pandemic, and 2023-2024, he pointed out that Turkey is showing a very optimistic picture. The worldsteel official said that, while Turkey, India and Brazil are expected to increase, the EU is showing the opposite trend.
Finally, Çiftçi touched upon the raw material markets. He stated that the current iron ore supply easily meets the demand of the steel industry and that the demand for higher quality ore will increase in the medium term due to the green transformation. Drawing attention to the interest in scrap as a green raw material, he emphasized that countries are developing policies to regulate scrap collection activities and that scrap supply will continue to increase. He concluded his words by adding that coal supply has showed serious fluctuations due to several factors, including Russia’s invasion of Ukraine, and that this has negatively affected the steel industry.