Commodity Market Report

Steel markets - long-term outlook - Q3 2020

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30 September 2020

Steel markets - long-term outlook - Q3 2020

Report summary

The coronavirus pandemic has accelerated the shift towards greener steelmaking technologies. In the long-term, as the engine of global steel demand growth shifts from China to India – and European environmental concerns grow – how will steelmaking technology evolve? In China, scrap based EAF production will take an increasing share of the market. India's demand growth will be supplied by additional integrated BF-BOF facilities. Europe is leading the way with emissions free steel production technology. The Middle East and North Africa has scope to raise DRI production. The Global steel market long-term outlook provides detailed supply and demand analysis and price forecasts for the steel market out to 2040.

Table of contents

  • 2020: China in a world of its own
  • How long will the recovery take?
  • 2020 marks an acceleration in the shift towards greener steelmaking
  • Long-term price forecast
    • China – peak steel demand in 2020?
    • Houses are for living in
    • China will produce over one billion tonnes of crude steel this year
    • Can India be the new engine of global growth?
    • Other contributors to global growth – big rates, but smaller tonnages
    • Limited demand growth potential elsewhere
    • Growers
    • Adapters
    • Stagnaters
    • 2020-2025: upward revision
    • Construction boosts another steel boom
    • Entering the steel demand peak zone
    • Crude steel production will surge above 1 Bt
    • Long term: gradual contraction to 2040 and beyond
    • Transportation will be the only positive growth sector in the long term
    • BF-BOF will remain the dominant steelmaking route
    • Demand
    • Downward revision in construction sector demand
    • but infrastructure sector demand will grow at a faster pace in the medium term
    • Automotive sector reviving, with robust long-term outlook
    • Supply
  • Japan
  • South Korea
  • Indonesia and Vietnam
  • Rest of Southeast Asia
    • Automotive
    • Construction
    • Trade and the macro-economy
    • European steelmaking is evolving, slowly, to bring down emissions
    • Falling production is bringing down emissions in the near term
    • Steelmakers will have to act to limit future emissions
    • Steel demand is fragile but should not contract further
    • Supported by exports, Turkish production has fared better
  • Middle East
  • North Africa
    • Demand outlook is fragile
    • Egyptian steel production will not suffer like demand
    • DRI production will increase in Egypt
    • Algerian production to grow despite weak domestic demand
    • Russian automotive industry is under further pressure
    • National projects are driving construction activity
    • Steel production in Russia will outpace demand
    • Ukrainian steel production will not return to its former glory
    • Central Asian countries have strong growth prospects
    • Construction: infrastructure (slightly) up, commercial construction down
    • Still bullish on residential, not anymore in commercial construction
    • No change in manufacturing: automotive to decline post-2030; machinery to modestly grow
  • Canada and Mexico
  • Brazil
    • Lower iron ore prices to drive future cost reduction
    • Metallurgical coal
    • Iron ore
    • EAFs unlikely to be cost competitive with BOFs without carbon pricing
    • Average country costs
    • BOF cash costs
    • EAF cash costs
    • Carbon costs
    • Where to go from here?
    • Scrap demand and prices
    • Metallics price forecast
    • Will Converging price premia prevail?
    • Steel price forecast
    • Indian price premia over China will continue to disappear

Tables and charts

This report includes 40 images and tables including:

  • Global steel demand - including China where demand is set to grow - to fall by 5% this year
  • but a 15% contraction is more severe for the world ex-China
  • ASEAN steel demand by country
  • Integrated steel projects across South-east Asian countries
  • Locations of the projects
  • Iran's steelmaking metallics balance
  • Middle East steel demand by country
  • Traditionally around 10% of global semis exports go to North Africa but exporting to the region has become increasingly difficult
  • with the region potentially adding as much as 8Mtpa of capacity. In 2020 Africa will take just 7% of global semis trade.
  • US steel trade with Mexico and Canada
  • US vehicle trade with Mexico and Canada
  • Brazil steel production and trade
  • Brazil production and recovery
  • South America (ex. Brazil) steel demand
  • Crude steel production forecast changes
  • Apparent steel consumption forecast changes
  • Steel demand change in 2020 by sector
  • Total population and working age percentage
  • Urbanised population each decades
  • Steel demand growth contribution by sector
  • The CAGR of each steel consumption sector
  • Crude steel production by route
  • Steel demand by sector
  • Automotive steel demand
  • Crude steel production vs. exports
  • Crude steel production share
  • Key emission reducing projects in Europe
  • Russian Federation National projects: investment shares by sector
  • Russian exports should increase to close the emerging global supply gap after 2030
  • US quality of infrastructure relative position vs infra spending
  • FAST Act capital allocation
  • INVEST Act capital allocation
  • US real steel demand by sector
  • Global average crude steel production costs
  • Global crude steel costs 2020
  • BOF versus EAF crude steel cash costs
  • Europe EAF v. BOF costs
  • US EAF V. BOF costs
  • BOF crude steel costs by country
  • EAF crude steel costs by country

What's included

This report contains:

  • Document

    Steel markets - long-term outlook - Q3 2020

    PDF 3.23 MB

  • Document

    Steel markets - Iron and steel making an introduction.pdf

    PDF 543.26 KB