MEPS EXPECTS A SLIGHT
RECOVERY IN GLOBAL STEEL PRODUCTION IN 2016
MEPS (International) Ltd believes that worldwide crude steel
production will be reported at 1.62 billion tonnes in 2015 -
equivalent to a decrease of almost 3 percent. It will be the first
reduction since 2009 - in the wake of the Great Recession.
Steel markets around the world are oversupplied relative to current
requirements. Demand from many of the largest steel consuming
countries - China, Japan, South Korea, Brazil, Russia and the United
States - is likely to fall this year. However, a modest upturn in
global output is anticipated in 2016. MEPS forecasts steel
production at 1.64 billion tonnes next year. This represents an
increase of 1.2 percent, compared with 2015.
The current weak conditions have led to heightened competition to
secure orders outside the country of origin. Steel prices in export
markets, which are usually denominated in US dollars, have been
further eroded by the depreciation of currencies. The growing amount
of trade defence measures has made it increasingly difficult for
surplus material to find a home.
In recent months, the reduction in steel prices has been more
pronounced than the fall in raw material input costs. Consequently,
mill margins have come under a great deal of negative pressure. With
the traditional Autumn pickup in purchasing virtually absent this
year, steelmakers have been forced to cut production further.
Several temporary and permanent closures have been undertaken and
there is uncertainty regarding the future of a large number of steel
MEPS World Steel
Outlook Quarter 3-2015
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