The opening session at the SteelOrbis Spring '10 Conference and 62nd IREPAS meeting featured the presentation of Kim Marti Subirana of CELSA, who said that, after a deep worldwide recession, the global economy is expanding again, pulled up by the strong performance of the Asian economies. Meanwhile, regarding the market outlook for 2010 in general, he said that the emerging and developing economies are generally further ahead on the road to recovery, whereas, in advanced economies, recovery is driven primarily by stimulus spendings. Mr. Marti also said that commodity prices rose strongly, due to the strong recovery in emerging Asia.
Mr. Marti continued his presentation explaining that finished steel consumption in BRIC countries continued its steady increase even in the crisis period in 2008 and in 2009, while global consumption excluding these countries declined by up to 27 percent in 2009 compared to 2008 levels. In 2010, growth in overall finished steel consumption is expected to rise, but the extent of the growth in global consuption excluding BRIC will be limited below 2008 levels.
Marti also showed that the share of long steel consumption in total finished steel consumption increased from 42.8 percent in 2000 to 52.8 percent in 2010 and that the increase rate in this ratio accelerated in 2009, due to the milder effect of economic crisis for developing countries. Long steel consumption grew by 96 percent from 1998 to 2010, while the share of rebar consumption in total consumption rose six percentage points, the share of sections regressed from 13 percent to seven percent, while the share of merchant bar and wire rod consumption remained the same in the same period.
Mr. Marti remarked that, even in the crisis period, world rebar consumption improved; however, this increase was only the result of China's high consumption., while the rest of the world recorded decreases. Section steel was the hardest-hit long steel product, since steel section is primarily consumed in North America.
According to the numbers presented by Mr. Marti, long steel prices showed some recovery in 2010; however, they are still significantly lower than 2008 levels.
Regarding short-term outlook Mr. Marti said economic recovery will result in increasing construction activity, with a better outlook for emerging countries and that real demand for long products will have a moderate growth in 2010. Raw materials, on the other side, will keep dictating price movements in steel products. New market practices for iron ore deals will also push prices up in the short/medium term. Actual production levels for rebars are in balance with market conditions, according to Mr. Marti, and they will be managed sensibly and according to real demand, as mills have their priority on recovering margins. Recovery in markets will rebuild confidence across the whole chain and will increase apparent demand, Mr. Marti concluded.