STEEL MARKET SHOWS STEADY GROWTH IN 1997
13 November 1997
The steel market
continued to improve in 1997 in UN/ECE member States. This
was confirmed at the seventh session of the Working Party on
Steel of the United Nations Economic Commission for Europe
(UN/ECE) held in Geneva from 29 - 31 October 1997. Steel
prices were increasing in the European Union, and in
the United States they have remained high although
they have recently been affected by downward pressure. Asian steel markets, the largest steel export market, have,
however, begun to slide as a result of the recent currency
turbulence. In Japan the steel market has also
suffered a setback in demand as a result of government
financial reform.
In the United States,
apparent consumption of steel products increased by 8.5 per
cent in the first seven months of 1997. Among the major
steel-consuming sectors, shipments of steel for construction,
conversion and processing were especially strong, recording
increases of 10.6 per cent and 10.4 per cent from January to
July. In 1997 as a whole, steel imports are estimated to
reach a record 30 million tonnes as a result of the
appreciation of the dollar and the relative strength of the
United States steel market. Exports should reach 5.5 million
tonnes. Domestic shipments are expected to amount to 95
million tonnes, an increase of more than 4 per cent over 1996
and the highest in almost 25 years.
The European Union steel market showed some signs of recovery in the first
months of 1997. But recently, it improved so much that, for
example, in Germany, demand and output have reached
record levels.
Among the
steel-consuming sectors, construction is expected to
experience the first signs of recovery in most member States.
The automobile sector is showing strong development owing to
governmental incentive schemes in certain member States.
Imports of steel products decreased by 13 per cent in the
first three months of 1997, compared with the same period in
1996. Exports of steel products also decreased by 11 per
cent. All in all, crude steel production is expected to
increase by 7.6 per cent in 1997 from 148 million tonnes in
1996, surpassing the 1995 level of 157 million tonnes.
In Bulgaria,
reflecting the contraction of the economy, apparent
consumption of steel products in 1997 will drop to 550
thousand tonnes from 700 thousand tonnes in 1996. In 1998,
apparent consumption is expected to recover to 620 thousand
tonnes.
In the Czech
Republic, crude-steel production increased by 5.8 per
cent in the first six months of 1997 to 3.4 million tonnes.
In the same period, exports of steel products increased by
6.1 per cent to 1.9 million tonnes; and imports increased by
20.6 per cent to 0.9 million tonnes.
In Hungary,
despite the favourable general economic outlook, apparent
steel consumption will not show a strong growth, posting a 3
per cent increase in 1997. Although investment and the
construction sector are strong, other sectors remain
sluggish. The favourable economic trend is expected to
continue into 1998, with GDP growing by 4.5 per cent.
Apparent steel consumption will also increase by 5 per cent
in 1998 as a result of the general economic development.
In Poland, the
GDP growth rate is expected to increase by 5.8 per cent in
1997 following a 6.0 per cent increase in 1996. The principal
force pushing the economy upward is industrial output,
particularly capital goods. In 1997, this would accelerate
more than the previous year, gaining a 9.0-9.5 per cent
increase, compared with 8.5 per cent in 1996. Sectors other
than capital goods, such as construction and automobile,
would see strong development in 1997. Crude steel production
is expected to increase to 12 million tonnes in 1997, after
dropping to 10.4 million tonnes in 1996. Apparent consumption
of steel products will reach 6.7 million tonnes in 1997,
following 6.1 million tonnes in 1996.
In Romania, the
economy is currently suffering under the severe austerity
measures imposed by the Government. Supported by the upswing
on the international steel market, crude-steel production
reached 4.9 million tonnes in the first nine months of 1997.
By the end of the year it will reach 6.7 million tonnes.
Owing to subdued activity in the steel-consuming sector,
exports of steel products soared by 50 per cent in the first
nine months of 1997. In 1998, domestic steel demand is
expected to increase as the economy recovers from the
austerity measures that were imposed by the Government.
In the Russian
Federation, consumption of steel products is likely to
decline to 15.4 million tonnes in 1997, from 17.4 million
tonnes in 1996 and 19.6 million tonnes in 1995. This decline
is blamed for the reduction in output in the major
steel-consuming sectors. Output in machinery, construction
and the defence sector will decline by 5-8 per cent in 1997.
Crude steel production will reach 46.0 million tonnes, a
decline of 6.5 per cent over 1996. Exports of rolled-steel
products, including semis, are estimated to amount to 26.1
million tonnes, compared with 25.2 million tonnes in 1996.
The Russian steel industry has been planning to modernize in
the period 1997-2005.
In Slovakia,
output in the construction sector will increase by 3.5 per
cent in 1997, compared with 4.4 per cent in 1996. Crude steel
production, which suffered a decline of 9.4 per cent in 1996
as a result of modernization of the second CC and the BOF, is
expected to increase by 8.3 per cent to 3.85 million tonnes
in 1997. In the first six months of 1997, exports of steel
products reached 1.6 million tonnes and imports 390 thousand
tonnes.
In Slovenia,
apparent steel consumption reached 300 thousand tonnes in the
first six months of 1997. Crude steel production in 1998 will
be at the same level as in 1997, around 400 thousand tonnes.
In Japan, among
the major steel-consuming sectors, demand from civil
engineering is expected to grow in 1997, while that from
commercial and residential is expected to decline. Demand
from manufacturing other than electrical machinery will
decline. Exports of steel products are estimated to increase
slightly this year over 1996. Imports will also increase in
1997.
In the Republic of
Korea, in the major steel-consuming sectors, construction
has suffered a decline of 1.3 per cent in 1997; however, it
will recover in 1998, increasing by 3.3 per cent. Automotive
production is expected to increase by 7.0 per cent in 1997
and 6.2 per cent in 1998. Although domestic car sales will
record negative growth, external demand will offset this
decline in both years. Apparent consumption of finished steel
is expected to grow by 1.6 per cent to 38.2 million tonnes.
In 1998, it will reach 40.1 million tonnes, an increase of
5.0 per cent.
In 1996, China produced 101.1 million tonnes of crude steel and ranked top
in the world. China is aiming to develop further its iron and
steel industry from now up to the early years of the next
century by increasing product quality and economic
efficiency, reducing energy consumption, reforming enterprise
management mechanisms and optimizing organizational
structure. The target for crude-steel production by the year
2000 is 110 million tonnes, with CC ratio increasing from the
current 46.5 per cent to 80 per cent. China will remain a net
importer of steel products by the end of and after 2000.