During her speech at the SteelOrbis 2016 Fall Conference & 75th IREPAS Meeting being held in Vienna on September 25-27, Becky E. Hites, president of Steel-Insights, said that the period of high growth is over and the industry is now in a period of “not so high growth”, adding that recently economies are not growing in sync, meaning less homogeneous economic growth. She indicated that China’s decision to shift back to a consumer-based economy has stalled growth in many trade partner countries and currency instability has further disrupted global trade.
Regarding the global steel industry, Ms. Hites said that demand is “ok” but not superb and pricing globally has been driven by falling raw material costs and “cheap” foreign offerings. She reminded participants that overcapacity is nothing new, and eventually demand will come back and supply and demand will achieve a balance; “the question is when is eventually”. “The colonial model has fallen; before we were producing and shipping it to somewhere else. Now everybody can produce their own steel and so we have to adjust to how we compete in this new environment,” Ms. Hites added.
The Steel-Insights president said she believes the Chinese government will eventually enact policies to deal with overcapacity. Regarding China’s five-year plans, she said they have a different system: “in the first two years they do not do much, but in the last three year they do a lot and so the rest of the world has to prepare for a different type of approach”.