By Park Hyong-ki
Staff Reporter
World steel demand is likely to grow continuously in the coming years on the back of rising consumption by automobile manufacturers, shipbuilders and constructors in Asia and South America.
According to the International Iron and Steel Institute (IISI), global use of steel will rise 5.9 percent to 1.18 billion metric tons this year, up 65 million tons from 2006.
In 2008, steel demand will increase 6.1 percent to 1.25 billion tons.
This figure, however, is lower than the 8.5 percent increase in 2006, as the world economy began to slow late last year.
Above all, the United States whose economy accounts for about 30 percent of the world economy is experiencing stagnation, especially in the construction and housing industries, and is stacking up its steel inventory.
This downturn will not only affect steel prices but also Asian exports to the world’s largest economy, as the U.S. is one of the biggest markets for Asians, including Korea.
But booming economies such as China and India will drive up worldwide demand.
``China remains the largest single market and the strongest growth area. Steel use will increase by 13 percent in 2007, followed by another 10 percent in 2008 making a total of 443 million tons _ 35 percent of the world total,’’ said IISI in a press release. ``A strong positive trend is seen for both years in Africa and South America.’’
China has been rationalizing and consolidating its steel industry to make it more globally competitive and to control the overflow of supply.
Meanwhile, Korea’s steel consumption is expected to increase about 5 percent to over 70 million tons this year, according to the POSCO Research Institute. Korea is the world’s No. 5 steel producer, rolling out 48.4 million tons last year. It is expected to reach a production capacity of 50 million tons by the end of this year.
When the world heads for an economic turnaround possibly after this year and draws down its inventories, ``a positive trend is forecast for North America,’’ IISI noted.