An industry body has predicted that world steel production will rise by over 100 mn tones in 2012, with demand coming from new housing and construction projects in the emerging and developing countries, particularly in Asia.

According to MEPS (International) Ltd. which published World Steel Outlook, production in 2012 will reach 1670 million tones, a 6.7 per cent increase on the 1565 million tonnes estimated for 2011, similar to the percentage increase registered last year.

Capacity utilisation rates are expected to rise in the short term due to restocking and higher prices in the second trimester could encourage more supply to the market. However, the recovery in real demand is not likely to match steel output due to the ongoing worldwide financial difficulties.

Europe will be impacted by the continuing sovereign debt crisis resulting in weak consumption and steel manufacturing in the EU is forecast to increase by a mere 3.7 per cent, year-on-year.

Though production in Turkey recorded an all-time high figure in 2011 and output in the CIS continues to recover from the 2009 low, production is predicted to rise by approximately 5 percent in 2012.

Poor market conditions will lead to a 3.3 per cent growth in North America, while South America will register a rise of 5.7 per cent, and Africa, which has been ht by civil unrest and operational difficulties, will grow by 6 per cent.

Middle East is expected to clock 10 per cent growth, China nine per cent and Japan just 2.3 per cent.

MEPS Global Crude Steel Production Forecast

(Million Tonnes)

Region             2011(e)            2012(f)

European Union          177.7   184.5

Other Europe/CIS        151.4   159.9

North America            119.1   123.0

South America            48.7     51.5

Africa/Middle East      36.7     39.8

China*             731.0   800.0

Japan   108.0   110.5

Other Asia/Oceania    192.1   200.9

World Total     1564.7             1670.0

(e) – Estimate (f) – Forecast

* adjusted to account for under-reporting

Source: MEPS – World Steel Outlook