Slower Growth for World Steel Demand in 2008, 2009, ABARE

World steel demand will increase only by 2.0% to 1.345 billion tonnes in crude steel basis in 2008 from 2007, according to outlook by Australian Bureau of Agricultural and Resource Economics (ABARE). ABARE revised the outlook downward by 3.8% from former version in September. ABARE expects the demand will increase by 1.8% to 1.369 billion tonnes in 2009 from 2008, which is 7.1% lower than September version. ABARE expects the lower demand pressures negatively on price negotiation for iron ore and coking coal for fiscal 2009 starting April 2009.

ABARE estimates world crude steel output will increase by 1.0% to 1.357 billion tonnes in 2008 from 2007 and by 1.5% to 1.377 billion tonnes in 2009 from 2008. The output in China increases by 0.2% in 2008 and by 5.9% in 2009. The steel demand will decrease in Europe, USA and Japan both in 2008 and 2009 while the demand growth slows down in China at year on year 6% in 2008 and 7.2% in 2009.

ABARE expects world iron ore trade increases by 6.5% to 898 million tonnes in 2008 from 2007, which is 4.2% lower than September version. ABARE expects coking coal trade will increase by 0.4% to 228 million tonnes, which is 2.1% lower than September version. ABARE expects the trade remains same level both for iron ore and coking coal in 2009 as 2008, which is 11.3% and 8.1% lower than September version.