World steel market & capacity developments - OECD.org
02-Dec-2010
Developments in world steelmaking capacity DSTI/SU/SC(2010)14 69th Steel Committee Meeting Paris 2-3 December 2010
World Steel capacity & production since 1980
Global crude steel capacity & production 2500
2000
mmt Capacity Output
1500 1000
500 0
1
02-Dec-2010
Trends in steelmaking capacity since 2000 • Total steelmaking capacity expanded rapidly since 2000, rising from 1,071.2 mmt in 2000 to 1,792.2 mmt in 2009, by 67.3%. • Non-OECD share has risen from 44% in 2000 to 64% in 2009. OECD share has fallen from 56% to 36%. • Chinese steelmaking capacity increased by 575.4 million tonnes, accounting for 83.7% of the total 687.7 million tonnes increase for all non-OECD economies during this decade. Change in steelmaking capacity since 2000 Changes (2009/2000) Non-OECD, of which: Non-OECD Europe CIS Latin America Africa Middle East Asia China Other Asia OECD, of which: NAFTA EU1/ Japan Korea World total
2000 466.2 15.0 124.7 46.4 25.4 14.0 240.6 149.6 91.0 605.0 154.1 241.8 146.9 49.7 1071.2
2002 529.1 15.5 124.2 49.8 26.9 15.2 297.5 197.0 100.5 551.6 138.9 239.5 144.8 52.0 1080.7
2005 785.3 17.3 124.5 53.9 29.8 19.0 540.9 424.0 116.9 569.0 144.8 244.7 124.1 53.2 1354.3
2007 1003.5 17.3 134.5 59.6 30.4 21.9 739.7 610.0 129.7 617.6 154.1 245.0 129.6 57.2 1621.1
2009 1153.9 18.0 143.1 62.7 31.4 28.1 870.7 725.0 145.7 638.3 155.8 250.0 129.9 64.2 1792.2
tonnes 687.7 3.0 18.4 16.2 5.9 14.0 630.1 575.4 54.7 33.3 1.7 8.2 -17.0 14.5 721.0
% 147.5 20.1 14.8 34.9 23.2 99.7 261.9 384.6 60.1 5.5 1.1 3.4 -11.6 29.2 67.3
World capacity utilisation rate Global capacity utilization % 90 85
80 75 70 65 60
2
02-Dec-2010
Capacity utilisation rate by region • Utilisation rates fell more sharply in the OECD area which suffered a more severe drop in demand. • The utilisation rate in China remained above the total average for the non-OECD economies.
Non-OECD, of which: Non-OECD Europe CIS Latin America Africa Middle East Asia China Other Asia OECD, of which: NAFTA EU1 Japan Korea World total
Capacity (mmt) 1153.9 18.0 143.1 62.7 31.4 28.1 870.7 725.0 145.7 638.3 155.8 250.0 129.9 64.2 1792.2
Production (mmt) 837.4 6.5 97.5 37.7 15.2 17.7 662.9 567.8 95.1 386.3 81.4 138.8 87.5 48.6 1223.7
Utilisation rate, % 72.6 35.9 68.1 60.2 48.5 62.9 76.1 78.3 65.3 65.3 52.3 55.5 67.4 75.7 68.3
Self-sufficiency rate • During the 2009 downturn, the CIS economies observed a significant increase, as the sharp domestic demand downturn led to a re-direction of shipments to foreign markets, particularly in North Africa and the Middle East. • In Asia, countries with growing demand such as China and India recorded falling self-sufficiency rates . Self-sufficiency rate of crude steel, %
CIS Latin America Africa Middle East Asia China India ASEAN-6 Japan, Korea, Chinese Taipei NAFTA EU
2000 249.1 121.1 87.1 51.2 94.7 93.1 89.2 33.1 114.9 77.4 103.9
2002 254.8 128.1 78.9 46.0 91.9 88.6 84.5 29.6 119.4 78.0 106.2
2005 232.3 127.3 81.3 38.4 96.5 97.6 106.1 33.6 115.0 79.9 107.0
2007 189.7 103.8 76.0 32.5 105.3 111.2 96.4 39.6 116.8 80.2 95.5
2009 240.1 100.2 51.3 36.4 100.5 100.5 98.0 37.5 130.0 86.0 108.7
Average 2000-09 231.3 116.3 75.5 39.6 97.8 98.1 94.1 34.7 118.4 79.8 104.1
3
02-Dec-2010
Steelmaking capacity forecasts to 2012 • Between 2009 and 2012, world crude steelmaking capacity is expected to increase by 13.1% from 1,792 mmt to 2,027 mmt. Of this 234 mmt worldwide increase, 87% is projected to occur in the nonOECD economies.
Non-OECD
– China: The Chinese steel industry should record the largest increase in capacity (to 815 mmt by 2012, accounting for 44.1% of the total non-OECD capacity increase to 2012). However, rate of growth is slowing noticeably (to 4% per year). – India: Indian steel industry to accelerate its capacity increase (16% per year to reach 114 mmt in 2012). Large iron ore resources attracting investment. – Latin America: Growth of capacity also strong (4.8% per year to 74.1 mmt in 2012). Most of this is occurring in Brazil. – Middle East: strong capacity expansion of 25% per year to reach 54.9 mmt by 2012. – CIS: capacity increasing by 2.4% per year to 153.5 mmt in 2012.
OECD – Slow capacity growth of 1.6% per year to 669.3 mmt by 2012. OECD share of capacity falling from 36% in 2009 to 33% in 2012. However, strong expansion expected in Korea, Mexico and Turkey.
Capacity/demand balance to 2012 •
If world consumption continues to grow by 5% (the consensus of market forecasts) in 2012, then crude apparent consumption would climb to 1,513 million tonnes that year. • Under these assumptions, the excess of world capacity might be more than 500 mmt in each of the next few years
2,200
million tonnes
World steel capacity and demand and projections to 2012
Steelmaking capacity
2,000
Apparent consumption (finished steel) Apparent consumption (crude steel)
1,800 1,600 1,400 1,200 1,000 800 600
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
4
02-Dec-2010
Steel capacity & production • The global capacity utilisation ratio recovers to 75% by 2012, thus returning to a rate that is closer in line with the long-term average observed before the exceptionally strong market boom of 20032008 • However, many uncertainties surround these assumptions. It is not clear whether such low utilisation ratios could be maintained by steelmakers who have high fixed costs. Global crude steel capacity & production Global crude steel capacity & production 2500
2000
mmt Capacity Output
1500
Globalcapacity capacityutilization utilization Global % 90 85
80 75
1000
500 0
70 65 60
5
Developments in world steelmaking capacity DSTI/SU/SC(2010)14 69th Steel Committee Meeting Paris 2-3 December 2010
World Steel capacity & production since 1980
Global crude steel capacity & production 2500
2000
mmt Capacity Output
1500 1000
500 0
1
02-Dec-2010
Trends in steelmaking capacity since 2000 • Total steelmaking capacity expanded rapidly since 2000, rising from 1,071.2 mmt in 2000 to 1,792.2 mmt in 2009, by 67.3%. • Non-OECD share has risen from 44% in 2000 to 64% in 2009. OECD share has fallen from 56% to 36%. • Chinese steelmaking capacity increased by 575.4 million tonnes, accounting for 83.7% of the total 687.7 million tonnes increase for all non-OECD economies during this decade. Change in steelmaking capacity since 2000 Changes (2009/2000) Non-OECD, of which: Non-OECD Europe CIS Latin America Africa Middle East Asia China Other Asia OECD, of which: NAFTA EU1/ Japan Korea World total
2000 466.2 15.0 124.7 46.4 25.4 14.0 240.6 149.6 91.0 605.0 154.1 241.8 146.9 49.7 1071.2
2002 529.1 15.5 124.2 49.8 26.9 15.2 297.5 197.0 100.5 551.6 138.9 239.5 144.8 52.0 1080.7
2005 785.3 17.3 124.5 53.9 29.8 19.0 540.9 424.0 116.9 569.0 144.8 244.7 124.1 53.2 1354.3
2007 1003.5 17.3 134.5 59.6 30.4 21.9 739.7 610.0 129.7 617.6 154.1 245.0 129.6 57.2 1621.1
2009 1153.9 18.0 143.1 62.7 31.4 28.1 870.7 725.0 145.7 638.3 155.8 250.0 129.9 64.2 1792.2
tonnes 687.7 3.0 18.4 16.2 5.9 14.0 630.1 575.4 54.7 33.3 1.7 8.2 -17.0 14.5 721.0
% 147.5 20.1 14.8 34.9 23.2 99.7 261.9 384.6 60.1 5.5 1.1 3.4 -11.6 29.2 67.3
World capacity utilisation rate Global capacity utilization % 90 85
80 75 70 65 60
2
02-Dec-2010
Capacity utilisation rate by region • Utilisation rates fell more sharply in the OECD area which suffered a more severe drop in demand. • The utilisation rate in China remained above the total average for the non-OECD economies.
Non-OECD, of which: Non-OECD Europe CIS Latin America Africa Middle East Asia China Other Asia OECD, of which: NAFTA EU1 Japan Korea World total
Capacity (mmt) 1153.9 18.0 143.1 62.7 31.4 28.1 870.7 725.0 145.7 638.3 155.8 250.0 129.9 64.2 1792.2
Production (mmt) 837.4 6.5 97.5 37.7 15.2 17.7 662.9 567.8 95.1 386.3 81.4 138.8 87.5 48.6 1223.7
Utilisation rate, % 72.6 35.9 68.1 60.2 48.5 62.9 76.1 78.3 65.3 65.3 52.3 55.5 67.4 75.7 68.3
Self-sufficiency rate • During the 2009 downturn, the CIS economies observed a significant increase, as the sharp domestic demand downturn led to a re-direction of shipments to foreign markets, particularly in North Africa and the Middle East. • In Asia, countries with growing demand such as China and India recorded falling self-sufficiency rates . Self-sufficiency rate of crude steel, %
CIS Latin America Africa Middle East Asia China India ASEAN-6 Japan, Korea, Chinese Taipei NAFTA EU
2000 249.1 121.1 87.1 51.2 94.7 93.1 89.2 33.1 114.9 77.4 103.9
2002 254.8 128.1 78.9 46.0 91.9 88.6 84.5 29.6 119.4 78.0 106.2
2005 232.3 127.3 81.3 38.4 96.5 97.6 106.1 33.6 115.0 79.9 107.0
2007 189.7 103.8 76.0 32.5 105.3 111.2 96.4 39.6 116.8 80.2 95.5
2009 240.1 100.2 51.3 36.4 100.5 100.5 98.0 37.5 130.0 86.0 108.7
Average 2000-09 231.3 116.3 75.5 39.6 97.8 98.1 94.1 34.7 118.4 79.8 104.1
3
02-Dec-2010
Steelmaking capacity forecasts to 2012 • Between 2009 and 2012, world crude steelmaking capacity is expected to increase by 13.1% from 1,792 mmt to 2,027 mmt. Of this 234 mmt worldwide increase, 87% is projected to occur in the nonOECD economies.
Non-OECD
– China: The Chinese steel industry should record the largest increase in capacity (to 815 mmt by 2012, accounting for 44.1% of the total non-OECD capacity increase to 2012). However, rate of growth is slowing noticeably (to 4% per year). – India: Indian steel industry to accelerate its capacity increase (16% per year to reach 114 mmt in 2012). Large iron ore resources attracting investment. – Latin America: Growth of capacity also strong (4.8% per year to 74.1 mmt in 2012). Most of this is occurring in Brazil. – Middle East: strong capacity expansion of 25% per year to reach 54.9 mmt by 2012. – CIS: capacity increasing by 2.4% per year to 153.5 mmt in 2012.
OECD – Slow capacity growth of 1.6% per year to 669.3 mmt by 2012. OECD share of capacity falling from 36% in 2009 to 33% in 2012. However, strong expansion expected in Korea, Mexico and Turkey.
Capacity/demand balance to 2012 •
If world consumption continues to grow by 5% (the consensus of market forecasts) in 2012, then crude apparent consumption would climb to 1,513 million tonnes that year. • Under these assumptions, the excess of world capacity might be more than 500 mmt in each of the next few years
2,200
million tonnes
World steel capacity and demand and projections to 2012
Steelmaking capacity
2,000
Apparent consumption (finished steel) Apparent consumption (crude steel)
1,800 1,600 1,400 1,200 1,000 800 600
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
4
02-Dec-2010
Steel capacity & production • The global capacity utilisation ratio recovers to 75% by 2012, thus returning to a rate that is closer in line with the long-term average observed before the exceptionally strong market boom of 20032008 • However, many uncertainties surround these assumptions. It is not clear whether such low utilisation ratios could be maintained by steelmakers who have high fixed costs. Global crude steel capacity & production Global crude steel capacity & production 2500
2000
mmt Capacity Output
1500
Globalcapacity capacityutilization utilization Global % 90 85
80 75
1000
500 0
70 65 60
5
