2012 Steel Production to reach 1.6 bn tonnes

London, 17 July 2012

According to a report by MEPS International, world crude steel output is predicted to expand by 3.7 percent, year-on-year, to 1600 million tonnes in 2012. MEPS envisages that steelmaking in the European Union will decline by 0.4 percent in 2012. This is below the prior estimate as regional producers continue to restrict supply in response to weak demand caused by the fragile economic situation.

Steel manufacturing in the rest of Europe is projected at 154.3 million tonnes in 2012 - a rise of 1.8 percent, year-on-year. Turkish steel output continues to show strong expansion. Russia will be the driver for growth in the CIS.

MEPS’ forecast for crude steel output in North America remains at 124.5 million tonnes in 2012. Solid production growth is envisaged in the US and Canada, however, mills may be forced to trim their capacity utilisation in the second half, following a strong start to the year.

MEPS believes South American raw steel production will climb by 2 percent in 2012 to more than 49 million tonnes.

Steel production in the Middle East is projected to increase by 10 percent, compared with the outturn in the previous twelve months as new installations lift output. More modest expansion is foreseen in Afri

Chinese crude steel output is expected to reach 750 million tonnes in 2012. MEPS is forecasting that an autumn recovery in steel demand should support near 6 percent growth from 2011 levels. However, MEPS has downgraded its prior forecasts as the building market has been slower to recover than previously anticipated. High inventory levels at the mills are likely to restrain output over the summer.

Steel production in India should follow a similar trend to the wider economy and show greater expansion this year compared with 2011. MEPS has maintained its prediction for a marginal increase in Japanese steelmaking. South Korean output should be a record high figure in 2012 - although the rise will be fairly modest following the surge witnessed in the previous twelve month period.

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