Barış Çiftçi: Global steel industry expected to grow in coming period

4 December, 2023 by

In a recent assessment at the 18th SteelOrbis Steel Conference, themed "New Horizons in Steel Markets," Dr. Barış Çiftçi, the Director of Industry Analysis at the World Steel Association (worldsteel), provided valuable insights into the current state of the global steel industry. With nearly 600 participants in attendance, Mr. Çiftçi acknowledged the challenges faced by the industry in the past year but expressed optimism about an upcoming period of growth.

Mr. Çiftçi attributed the transformative shift in production costs to Russia's invasion of Ukraine, which propelled the steel industry to an unprecedented level. Notably, he highlighted the automotive sector's remarkable double-digit growth this year, signaling the commencement of a recovery in supply chains that has contributed to overall industry growth. Moreover, he underscored the positive impact of diminishing inflation rates and the anticipated end of persistent interest rate hikes in market dynamics.

Addressing specific regional trends, Mr. Çiftçi noted the stabilization of the Chinese residential sector, constituting 30 percent of the country's steel demand. This stability is expected to persist into the first half of the next year, according to his analysis.

Offering predictions on global steel demand, the worldsteel official highlighted a slight slowdown in China's growth rate, though positive sentiments endure. He presented data indicating a projected 1.9 percent increase in global steel demand to 1.81 billion metric tons this year and a further 1.9 percent growth to 1.85 billion metric tons in the following year. However, he cautioned that the EU's steel demand is anticipated to reach only 75.0 percent of the 2007 levels. Notably, despite expectations of a decline in Russia's domestic steel demand due to sanctions, state-backed investments are projected to stimulate growth in the country. Conversely, a contraction of one percent is foreseen in the combined steel demand of the US, Mexico, and Canada.

Drawing a comparison between 2019 and the outlook for 2023-2024, Mr. Çiftçi emphasized Turkey's optimistic trajectory while highlighting opposing trends in the EU.

In his remarks on raw material markets, Mr. Çiftçi addressed the adequacy of the current iron ore supply to meet steel industry demands. He predicted a rise in demand for higher-quality ore in the medium term, driven by green transformation initiatives. Acknowledging the increasing interest in scrap as an eco-friendly raw material, he emphasized the development of policies regulating scrap collection activities and the expected growth in scrap supply. Concluding his observations, he noted the significant fluctuations in coal supply, influenced by factors such as Russia's invasion of Ukraine, and the resultant negative impact on the steel industry.

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