Commodity market report

Global steel long-term outlook Q1 2014

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Report summary

This update gives our revised view on steel market fundamentals. Our forecasts of global steel demand are little changed from our interim update published in December with a combination of faltering growth in key emerging markets and steady but by no means smooth recovery in the developed markets remaining the key themes on the demand side. While China has had a jittery start to the year in terms of sentiment we remain broadly positive on the medium and long term growth story...

What's included

This report contains

  • Document

    SMS LT Q1 2014(V2.8).xls

    XLS 1.96 MB

  • Document

    Global steel long-term outlook Q1 2014

    PDF 2.29 MB

  • Document

    Global steel long-term outlook Q1 2014

    ZIP 1.30 MB

  • Document

    Executive summary

    PDF 172.93 KB

  • Document

    Demand

    PDF 1.01 MB

  • Document

    Supply

    PDF 550.66 KB

  • Document

    Supply-demand balances

    PDF 311.60 KB

  • Document

    Costs

    PDF 396.88 KB

  • Document

    Margins

    PDF 202.55 KB

  • Document

    Prices

    PDF 467.60 KB

Table of contents

  • Executive summary
  • Demand
  • Supply
  • Supply-demand balances
  • Costs
  • Margins
  • Prices

Tables and charts

This report includes 41 images and tables including:

Images

  • Supply: Image 1
  • Helped by lower production costs due to falling raw materials prices
  • There exists a good correlation between capacity utilisation rates and mill margins
  • Utilisation rates should see improvement in the key markets over the medium term
  • Over the medium term iron ore and coking coal will experience price weakness…
  • …with a negative net effect on hot metal production costs
  • 2013 scrap imports fell sharply among key importers, weakening prices
  • USA and EU scrap prices will be supported relative to hot metal production costs
  • BOF unit production costs are expected to remain lower than EAF throughout the forecast period
  • Finished steel costs are expected to weaken further until 2016, more so in the EU and China
  • 2013 was a year of weak but improving margins
  • We expect to see margins return to long run equilibrium levels
  • While deterioration has halted, steelmakers continue to face relatively high costs and low prices
  • Greater production discipline allowed US prices to maintain their premium in 2013
  • Improved demand and margins will support price recovery despite weaker cost support
  • Long term, cost support sets in, but we expect price growth trend to remain below pre-crisis peak
  • Demand: Image 1
  • India has scope for significant steel demand growth in the coming decades…
  • Demand: Image 8
  • Southern European oversupply dampens growth prospects in construction
  • Higher household income and replacement requirements will support growth in CEE
  • EU car production expanded overall in 2013, partly thanks to regained competitiveness in Spain
  • As some EU countries regain competitiveness, the net effect of delocalisation on steel demand will be attenuated
  • Long-term growth in manufacturing is tied to exports, particularly to the MENA region
  • Supply: Image 3
  • Demand: Image 2
  • The reliance on investment supports the steel demand
  • China property forecast by sub-sector
  • Medium term economic stimuli will counter the effects of population decline on construction
  • Consumer goods will decline as a share of steel demand from manufacturing
  • New cities, reconstruction and housing programmes will support steel consumption in the Middle East
  • In Africa strong demographics have been trumped by weak governance but maintain long term potential
  • We forecast similar growth trend to the 80’s, however no significant rebound is expected in the long term…
  • Demand: Image 15
  • Demand: Image 16
  • …while car weights and steel intensity will fall

Tables

  • Utilisation rates in most regions should see a steady improvement over the medium term
  • Costs: Table 1
  • Prices: Table 1
  • Supply: Table 1
  • Demand: Table 1

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