World steel output continues to grow at an astonishing rate. The year, on year, percentage increase in 2006 is expected to top the gain made in 2004 and will be the largest for more than three decades.
MEPS (International) Ltd now forecasts global crude steel manufacturing this year at 1237 million tonnes. Blastfurnace iron production is expected to reach 873 million tonnes - a double digit expansion on the year earlier figure.
In the seven years since the end of the last century, iron and steel production will have expanded by around 446 million tonnes - a rise of 57 percent. This equates to an average annual growth rate of 6.6 percent.
Steel output in the EU is now expected to reach almost 199 million tonnes this year. Blastfurnace iron production should top 111 million tonnes. These figures show increases over 2005 of 12.3 million and 4.8 million tonnes, respectively. The modest rise in pig iron output was brought about by blastfurnace relines in Spain and a fire in Germany. Furthermore, strong construction demand has helped lift the volume of steelmaking at the mini mills.
North American steel production is now forecast to reach almost 134 million tonnes in 2006. This compares with approximately 127 million tonnes in the previous twelve months. Domestic demand will rise by near to 20 million tonnes. Substantial import volumes have entered the region.
Asian steel making this year should be above 660 million tonnes - approximately 13 percent above the figure recorded in 2005. Blastfurnace iron production is forecast to reach more than 551 million tonnes - up by 74 million tonnes on the year earlier outturn. The majority of the increase will come from countries using the blastfurnace/oxygen steelmaking process - notably China.
Whether or not the large increase will lead to falling prices is the subject of speculatiom. Whilst consolidations such as Mittal Arcelor and the proposed Tata Corus deal may allow larger producers to control supply, much world steel production is fragmented. This may lead to pressure on internationally traded products.