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Commodity Market Report 30 September 2020

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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.

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
Steelmakers are in for a rough ride this year. But what awaits those that survive?
- 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
Supply
- Growers
- Adapters
- Stagnaters
China
- 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
India
- 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
EU and the UK
- 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
Turkey
- Steel demand is fragile but should not contract further
- Supported by exports, Turkish production has fared better
Middle East
North Africa
Egypt
- Demand outlook is fragile
- Egyptian steel production will not suffer like demand
- DRI production will increase in Egypt
Algeria
- Algerian production to grow despite weak domestic demand
Russia
- Russian automotive industry is under further pressure
- National projects are driving construction activity
- Steel production in Russia will outpace demand
Other CIS and Ukraine
- Ukrainian steel production will not return to its former glory
- Central Asian countries have strong growth prospects
USA
- 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
Other South America
- 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