Oct 14, 2015
Finished steel demand across the North American Free Trade Agreement region is expected to contract by 2.7% this year, to 140.8 million mt, but 2016 should see growth of 2.1% to 143.7 million mt, according to the World Steel Association's short-range outlook, released Monday.
In the US, the largest steel producer and consumer in the region, demand is forecast to dip 3% in 2015 to 103.8 million mt, and return to growth of 1.3% in 2016, reaching 105.2 million mt, the organization said during its annual meeting, worldsteel-49, in Chicago.
Nucor Corp. CEO John Ferriola, the association's incoming vice chairman, said the automotive sector is among the key end-user segments that will drive modest US demand growth in 2016.
Auto production is expected to be between 17.6 million units and 17.9 million units next year, up from about 17.2 million in 2015, according to recent estimates.
US non-residential construction is showing "slow, but steady improvement," Ferriola said during a briefing Monday, with about 5-6% growth this year compared with 2014.
The US energy sector's sluggishness is expected to continue for some time. "Almost no steel is going into the energy sector at all," he said.
More must be done in the US to stimulate overall economic growth, Ferriola said. "Ultimately, to improve steel demand is to improve the economy," he said.
Speaking during the same briefing, German Steel Federation President Hans Jurgen Kerkhoff said much of this year's anticipated 1.7% decline in global steel consumption -- to around 1.51 billion mt -- can be tied to China's slowdown. "China steel demand has peaked," Kerkhoff said.
"It is clear that the steel industry has, for the time being, reached the end of a major growth cycle, which was based on the rapid economic development of China," he added. "The steel industry is now experiencing low growth, which will last for the time it takes for other developing regions of sufficient size and strength to produce another major growth cycle."
Source: Platts