North American Steel Industry: Market Developments ... - OECD.org
North American Steel Industry: Market Developments, Outlook and Key Policy Challenges OECD Steel Committee May 31-June 1, 2012 Paris, France * American Iron and Steel Institute (AISI) Committee on Pipe and Tube Imports (CPTI) Steel Manufacturers Association (SMA) Specialty Steel Industry of North America (SSINA) Canadian Steel Producers Association (CSPA) Mexican Steel Producers Association (CANACERO)
NAFTA Apparent Demand US Demand
45,000
Mexico Demand
Canada Demand
NAFTA Capacity
Metric Tons ('000)
40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 -
.
.
.
.
.
.
2008
.
.
.
.
.
2009
.
.
.
2010
.
.
2011
. 2012
Metric Tons ('000)
NAFTA Crude Steel Production & Capacity US Production
45,000 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 .
.
. 2008
Source: AISI, Statistics Canada, Canacero
.
Mexico Production
.
.
.
.
Canada Production
.
2009
.
. 2010
.
NAFTA demand remains below pre-recession levels. Following some weakening of demand in the 2H11, 1Q12 demand saw a modest rebound 2% higher than 1Q11. Still, 2012 demand will likely be 10-15 million MT lower than before the financial crisis.
NAFTA Capacity
.
.
. 2011
.
.
NAFTA steel production increased by 6% in 1Q ’12 to the highest level since 2008, but still well below peak. The utilization rate was 77% in 1Q ’12, which is at or slightly above most other world’s regions.
2012
2
1
NAFTA Steel Imports NAFTA Finished Imports
Import Market Share 35.0%
Metric Tons (millions)
8 7 6 5 4 3 2 1
30.0% 25.0% 20.0% 15.0% 10.0% 5.0% 0.0%
-
.
.
.
.
.
.
2008
.
.
.
.
2009
.
.
.
.
2010
.
.
.
2011
2012
NAFTA import market share, at18% in 1Q12, is up 3 percentage points vs. 1Q11. At this rate, imports would annualize at 23 million MT vs. 18 million in ’11. This trend, should it continue, would seriously impede our industry’s ongoing recovery.
NAFTA Steel Exports
Metric Tons (million)
NAFTA Exports
% of Shipments
3.0
35.0%
2.5
30.0% 25.0%
2.0
20.0%
1.5
15.0%
1.0 0.5 0.0
5%
7%
.
6%
.
7%
.
8%
6%
.
.
7%
.
2008
6%
.
5%
6%
.
.
.
2009
6%
5%
.
6%
5%
.
.
.
2010
Source: AISI, Statistics Canada, Canacero
6%
5%
.
10.0% 4%
.
2011
5.0% 0.0%
.
NAFTA exports to other regions dropped sharply in the 1Q12 to 1.1 million MT from 1.5 million MT in the 4Q11. The slowing global economy and other factors have reduced NAFTA export opportunities
2012
3
NAFTA Steel Production and Apparent Steel Demand Data for 2008-1Q 2012
28.7
27.7 26.9
28.9 29.5 29.8 29.3
24.4
88.00% 22.0 17.4 17.6
72. 68.
15
55
10
67.
70
71.
74.
73
80%
72. 77 60%
62
4
2nd
3rd
4th
1st
2009
-20%
2nd
3rd
4th
1st
2010
2nd
3rd
4th
2011
Exports
1st
2008*
2012
40%
30
1.6 1.4 1.3
1.4 1.3
1.2
1.3
1.6 1.5 1.6 1.3
1.1
1.0
30% 20%
1.0
10%
0.8
0%
0.6
-10%
0.4
-20%
0.2
-30%
0.0 2008*
3rd
2009
4th
1st
2nd
3rd
2010
Source: AISI, Statistics Canada, Canacero
4th
1st
2nd 3rd
4th
2011
*Average of 1Q-3Q ’08
1st 2nd 3rd 4th
1st
2010
2011
2012
2009
50%
36.0 26.7
25
20.7
20
21.5
28.7 28.3
30.8 30.5 31.3 30.3 31.4
30%
23.2
18.3
20%
15
10%
10 0%
5
-10% Ave
1st
40%
27.4
-
-40% 2nd
Million Metric Tons
35
1.9
1st 2nd 3rd 4th
Apparent Supply 50%
1st
20%
Ave 1st 2nd 3rd 4th
60%
Ave
30%
2.4
-10%
1.8
1.2
40%
0%
2.0
1.4
3.5
50%
4.3
1
40
1.6
4.6 4.1
10%
20% 1st
5.2
4.7
-
Ave.
70%
5.8 60%
2
40%
44
2008*
3.3
2.7
3
5.5
5.0
4.8
5
44.
5
Finished Imports
6.4
6
31.1
Utilization Rate
27.0
20
Million Metric Tons
7
Q-Y-Q % increase
Million Metric Tons
30 25
100%
34.2
Million Metric Tons
35
Q-Y-Q % increase
40
Q-Y-Q % increase
NAFTA Raw Steel Production & Utilization
2008*
1st
2nd
3rd
2009
4th
1st
2nd
3rd
2010
4th
1st
2nd
3rd
2011
4th
1st 2012
2012
4
2
Despite Gains in Apparent Finished Steel Use (AFSU), Forecast NAFTA AFSU Still 13% Below Pre-Recession Average United States Million MT
2011
Crude Steel Use
101.0
Finished Steel Use
89.1
chg (%)
2012 107.9 94.2
6.8% 5.7%
Canada 2013
Million MT
2011
113.8
Crude Steel Use
99.5
Finished Steel Use
20.9 14.2
2012 21.7 14.5
Mexico chg (%) 3.8% 2.1%
2013
Million MT
2011
2012
22.7
Crude Steel Use
15.7
16.1
2.5%
16.6
14.9
Finished Steel Use
18.0
18.8
4.4%
19.6
Apparent Finished Steel Use (ASU) 2006
2007
2008
2009
2010
2011
2012f
2013f
Finished Steel
155.7
141.7
130.5
84.6
112.9
121.3
127.5
134.0
* This was the outlook as of March 2012. The softening of NAFTA and world economies, together with higher than anticipated steel import levels, suggest more modest prospects for the NAFTA steel industry for the remainder of 2012.
Source: worldsteel
2013
From 2004 to 2007 (last 4 full years before the economic crisis began), AFSU in the NAFTA region averaged 146 million MT/year. Should the outlook for 2013 be achieved, AFSU next year would still be 8% below that average.
Spring 2012 Outlook* For NAFTA Region (Million MT)
chg (%)
5
NAFTA INDIRECT STEEL TRADE NAFTA steel trade deficit in manufactured goods over 15 million MT in 2011 NAFTA INDIRECT STEEL TRADE DEFICIT WITH CHINA and ROW Steel Content M illion M T
-
(5.0)
(5.9)
(6.4)
(6.5)
(5.6)
(6.8)
(5)
(7.6)
(5.4) (10)
(11.8)
(11.8)
(7.3)
(9.4)
(7.2)
(8.2)
(15)
(20)
(25)
2005
2006
2007
2008
2009
2010
2011
TOTAL DEFICIT
(16,842,803)
(17,664,694)
(15,739,700)
(13,831,700)
(10,917,200)
(13,970,500)
(15,742,200)
ROW - ex. China
(11,810,103)
(11,809,094)
(9,385,900)
(7,297,700)
(5,359,600)
(7,152,300)
(8,151,800)
NAFTA’s China
indirect steel trade(5,855,600) deficit with(6,353,800) the rest of the world (ROW) in 2011(6,818,200) was 13% above the 2010 (5,032,700) (6,534,000) (5,557,600) (7,590,400) deficit, which itself was the highest since 2007. It was also 28% greater than our direct steel trade deficit with the ROW last year, which was 12.3 million MT. Nearly 48% of our region’s total 2011 indirect steel trade deficit (7.6 million MT) was with China. NAFTA’s 2011 indirect steel trade deficit with China was at an all-time high -- up 11% vs. 2010 and up 51% vs. 2005. Source: AISI, Global Trade Atlas
6
3
Summary Points: NAFTA Steel Market Conditions and Key Policy Challenges •
The NAFTA steel market continues a slow and modest recovery, and remains vulnerable to unfair trade surges and downside risks.
•
In spite of the gains, North America’s steel production, capacity utilization and demand all remain lower than pre-recession levels, and the NAFTA region’s AFSU in 2012 would still be below any pre-recession year since 1995.
•
In the 1Q of 2012, import levels and import market shares are increasing at much faster rates than the gains being achieved by NAFTA steel producers.
•
Large and growing imports of steel-containing goods, mainly from China, continue to add to this problem, and currency undervaluation is continuing to have a negative impact.
•
Our region’s indirect steel trade deficit with the rest of the world in 2011 was 13 percent higher than it was in 2010, which itself was the highest since 2007.
•
There is now a heightened concern about both direct and indirect steel export surges to NAFTA in 2012, due to the economic downturn in the EU, slowing growth in China and other factors.
•
Key trade policy concerns continue to be: global steel overcapacity; government subsidies to steel; government manipulation of currency, raw material markets and border measures; customs fraud; and market-distorting practices of state-owned enterprises. 7
4
NAFTA Apparent Demand US Demand
45,000
Mexico Demand
Canada Demand
NAFTA Capacity
Metric Tons ('000)
40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 -
.
.
.
.
.
.
2008
.
.
.
.
.
2009
.
.
.
2010
.
.
2011
. 2012
Metric Tons ('000)
NAFTA Crude Steel Production & Capacity US Production
45,000 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 .
.
. 2008
Source: AISI, Statistics Canada, Canacero
.
Mexico Production
.
.
.
.
Canada Production
.
2009
.
. 2010
.
NAFTA demand remains below pre-recession levels. Following some weakening of demand in the 2H11, 1Q12 demand saw a modest rebound 2% higher than 1Q11. Still, 2012 demand will likely be 10-15 million MT lower than before the financial crisis.
NAFTA Capacity
.
.
. 2011
.
.
NAFTA steel production increased by 6% in 1Q ’12 to the highest level since 2008, but still well below peak. The utilization rate was 77% in 1Q ’12, which is at or slightly above most other world’s regions.
2012
2
1
NAFTA Steel Imports NAFTA Finished Imports
Import Market Share 35.0%
Metric Tons (millions)
8 7 6 5 4 3 2 1
30.0% 25.0% 20.0% 15.0% 10.0% 5.0% 0.0%
-
.
.
.
.
.
.
2008
.
.
.
.
2009
.
.
.
.
2010
.
.
.
2011
2012
NAFTA import market share, at18% in 1Q12, is up 3 percentage points vs. 1Q11. At this rate, imports would annualize at 23 million MT vs. 18 million in ’11. This trend, should it continue, would seriously impede our industry’s ongoing recovery.
NAFTA Steel Exports
Metric Tons (million)
NAFTA Exports
% of Shipments
3.0
35.0%
2.5
30.0% 25.0%
2.0
20.0%
1.5
15.0%
1.0 0.5 0.0
5%
7%
.
6%
.
7%
.
8%
6%
.
.
7%
.
2008
6%
.
5%
6%
.
.
.
2009
6%
5%
.
6%
5%
.
.
.
2010
Source: AISI, Statistics Canada, Canacero
6%
5%
.
10.0% 4%
.
2011
5.0% 0.0%
.
NAFTA exports to other regions dropped sharply in the 1Q12 to 1.1 million MT from 1.5 million MT in the 4Q11. The slowing global economy and other factors have reduced NAFTA export opportunities
2012
3
NAFTA Steel Production and Apparent Steel Demand Data for 2008-1Q 2012
28.7
27.7 26.9
28.9 29.5 29.8 29.3
24.4
88.00% 22.0 17.4 17.6
72. 68.
15
55
10
67.
70
71.
74.
73
80%
72. 77 60%
62
4
2nd
3rd
4th
1st
2009
-20%
2nd
3rd
4th
1st
2010
2nd
3rd
4th
2011
Exports
1st
2008*
2012
40%
30
1.6 1.4 1.3
1.4 1.3
1.2
1.3
1.6 1.5 1.6 1.3
1.1
1.0
30% 20%
1.0
10%
0.8
0%
0.6
-10%
0.4
-20%
0.2
-30%
0.0 2008*
3rd
2009
4th
1st
2nd
3rd
2010
Source: AISI, Statistics Canada, Canacero
4th
1st
2nd 3rd
4th
2011
*Average of 1Q-3Q ’08
1st 2nd 3rd 4th
1st
2010
2011
2012
2009
50%
36.0 26.7
25
20.7
20
21.5
28.7 28.3
30.8 30.5 31.3 30.3 31.4
30%
23.2
18.3
20%
15
10%
10 0%
5
-10% Ave
1st
40%
27.4
-
-40% 2nd
Million Metric Tons
35
1.9
1st 2nd 3rd 4th
Apparent Supply 50%
1st
20%
Ave 1st 2nd 3rd 4th
60%
Ave
30%
2.4
-10%
1.8
1.2
40%
0%
2.0
1.4
3.5
50%
4.3
1
40
1.6
4.6 4.1
10%
20% 1st
5.2
4.7
-
Ave.
70%
5.8 60%
2
40%
44
2008*
3.3
2.7
3
5.5
5.0
4.8
5
44.
5
Finished Imports
6.4
6
31.1
Utilization Rate
27.0
20
Million Metric Tons
7
Q-Y-Q % increase
Million Metric Tons
30 25
100%
34.2
Million Metric Tons
35
Q-Y-Q % increase
40
Q-Y-Q % increase
NAFTA Raw Steel Production & Utilization
2008*
1st
2nd
3rd
2009
4th
1st
2nd
3rd
2010
4th
1st
2nd
3rd
2011
4th
1st 2012
2012
4
2
Despite Gains in Apparent Finished Steel Use (AFSU), Forecast NAFTA AFSU Still 13% Below Pre-Recession Average United States Million MT
2011
Crude Steel Use
101.0
Finished Steel Use
89.1
chg (%)
2012 107.9 94.2
6.8% 5.7%
Canada 2013
Million MT
2011
113.8
Crude Steel Use
99.5
Finished Steel Use
20.9 14.2
2012 21.7 14.5
Mexico chg (%) 3.8% 2.1%
2013
Million MT
2011
2012
22.7
Crude Steel Use
15.7
16.1
2.5%
16.6
14.9
Finished Steel Use
18.0
18.8
4.4%
19.6
Apparent Finished Steel Use (ASU) 2006
2007
2008
2009
2010
2011
2012f
2013f
Finished Steel
155.7
141.7
130.5
84.6
112.9
121.3
127.5
134.0
* This was the outlook as of March 2012. The softening of NAFTA and world economies, together with higher than anticipated steel import levels, suggest more modest prospects for the NAFTA steel industry for the remainder of 2012.
Source: worldsteel
2013
From 2004 to 2007 (last 4 full years before the economic crisis began), AFSU in the NAFTA region averaged 146 million MT/year. Should the outlook for 2013 be achieved, AFSU next year would still be 8% below that average.
Spring 2012 Outlook* For NAFTA Region (Million MT)
chg (%)
5
NAFTA INDIRECT STEEL TRADE NAFTA steel trade deficit in manufactured goods over 15 million MT in 2011 NAFTA INDIRECT STEEL TRADE DEFICIT WITH CHINA and ROW Steel Content M illion M T
-
(5.0)
(5.9)
(6.4)
(6.5)
(5.6)
(6.8)
(5)
(7.6)
(5.4) (10)
(11.8)
(11.8)
(7.3)
(9.4)
(7.2)
(8.2)
(15)
(20)
(25)
2005
2006
2007
2008
2009
2010
2011
TOTAL DEFICIT
(16,842,803)
(17,664,694)
(15,739,700)
(13,831,700)
(10,917,200)
(13,970,500)
(15,742,200)
ROW - ex. China
(11,810,103)
(11,809,094)
(9,385,900)
(7,297,700)
(5,359,600)
(7,152,300)
(8,151,800)
NAFTA’s China
indirect steel trade(5,855,600) deficit with(6,353,800) the rest of the world (ROW) in 2011(6,818,200) was 13% above the 2010 (5,032,700) (6,534,000) (5,557,600) (7,590,400) deficit, which itself was the highest since 2007. It was also 28% greater than our direct steel trade deficit with the ROW last year, which was 12.3 million MT. Nearly 48% of our region’s total 2011 indirect steel trade deficit (7.6 million MT) was with China. NAFTA’s 2011 indirect steel trade deficit with China was at an all-time high -- up 11% vs. 2010 and up 51% vs. 2005. Source: AISI, Global Trade Atlas
6
3
Summary Points: NAFTA Steel Market Conditions and Key Policy Challenges •
The NAFTA steel market continues a slow and modest recovery, and remains vulnerable to unfair trade surges and downside risks.
•
In spite of the gains, North America’s steel production, capacity utilization and demand all remain lower than pre-recession levels, and the NAFTA region’s AFSU in 2012 would still be below any pre-recession year since 1995.
•
In the 1Q of 2012, import levels and import market shares are increasing at much faster rates than the gains being achieved by NAFTA steel producers.
•
Large and growing imports of steel-containing goods, mainly from China, continue to add to this problem, and currency undervaluation is continuing to have a negative impact.
•
Our region’s indirect steel trade deficit with the rest of the world in 2011 was 13 percent higher than it was in 2010, which itself was the highest since 2007.
•
There is now a heightened concern about both direct and indirect steel export surges to NAFTA in 2012, due to the economic downturn in the EU, slowing growth in China and other factors.
•
Key trade policy concerns continue to be: global steel overcapacity; government subsidies to steel; government manipulation of currency, raw material markets and border measures; customs fraud; and market-distorting practices of state-owned enterprises. 7
4
