Kim Marti Subirana, international sales director of CELSA Group, focused during his presentation at the SteelOrbis Spring 09 Conference & 60th IREPAS Meeting held in Athens on global long product consumption and historical price trends, while also giving his view on the prospects for a recovery in the steel markets
Remarking that in 2008 world steel consumption decreased by 0.4 percent year on year, Mr. Marti went on to give a breakdown of global long product consumption for the year in question: in 2008 world merchant bar consumption reached 145 million mt, up 2.8 percent, while steel section consumption declined to 51 million mt, down 9.8 percent, with rebar consumption decreasing by 4.3 percent to 211 million mt. Meanwhile, in 2008 wire rod consumption showed no change compared to the previous year, remaining at 148 million mt.
According to Mr. Marti, 60 percent of the 211 million mt of rebar consumption in 2008 was accounted for by East and Southeast Asia; meanwhile, the CIS accounted for five percent, Europe for nine percent, North America for six percent, with the remaining 20 percent consumed by other regions of the world. In contrast, when we look at the corresponding 1992 figures for rebar consumption East and Southeast Asia were responsible for 48 percent, the CIS for seven percent, North America for six percent, while consumption in other regions came to 18 percent of the total.
Furthermore, Mr. Marti also compared steel consumption per capita in 2003 with the estimated figures for 2008 as follows:
Country | Steel Consumption in 2003 per capita (kg) | Estimated Steel Consumption in 2008 per capita (kg) |
USA | 24 | 26 |
EU-15 | 36 | 33 |
Japan | 83 | 74 |
South Korea | 253 | 254 |
China | 39 | 71 |
Eastern Europe and CIS | 10 | 27 |
Brazil | 10 | 15 |
India | 5 | 8 |
Turkey | 56 | 99 |
Touching on the historical development of steel prices in his speech, Mr. Marti remarked that, as the IREPAS data show, from 1993 scrap prices increased by 238 percent, while rebar prices went up by 215 percent; on the other hand, the margin between them also increased by 196 percent in the same period. In 1993, rebar prices stood at $285/mt, scrap prices were at $133/mt, and the margin between them was $152/mt. However, in March 2009 the respective figures were $465/mt, $235/mt and $230/mt.
Turning his attention to the outlook for the near future, Mr. Marti stated that demand has stabilized albeit at low levels, while stocks are reasonable. A few sources of fresh demand are generating a certain dynamism in the market for billets and rebars. Scrap prices have bounced twice indicating that the bottom may have been reached, and price and spread fundamentals are at historic lows.
According to the CELSA Group sales director, bank rescue plans and reactivation packages around the world will restore confidence and help investments and demand to recover.
Concluding his speech, Kim Marti expressed his view that prices are already starting to recover from their lows and that confidence and business levels will have to see an initial improvement for demand to recover.