The expansion or contraction of gross domestic product (GDP) may be considered a predictor of the health of the steelmaking and steel manufacturing industries, worldwide and domestically. The World Bank’s global GDP growth forecast for 2010 and 2011 was 2.0% and 3.2%, respectively, after a decline of 2.9% in 2009. The Federal Reserve Bank of Philadelphia survey of forecasters showed the economy expanding in 2010, 2011, and 2012 at rates of 2.3%, 2.9%, and 3.2%, respectively, after contracting at a rate of 2.6% in 2009.
MEPS (International) Inc. forecast total world steel production in 2009 to be down 12% from that in 2008 (MEPS, 2009). MEPS also forecast declining steel production in 2009 in the European Union, South America, the Commonwealth of Independent States (CIS), Africa, and Asia, of 26%, 24%, 18%, 9%, and 3%, respectively. World Steel Dynamics (WSD) forecast world crude steel production to decrease by 9% in 2009 and increase by 14%, 6%, and 5% in 2010, 2011, and 2012, respectively. WSD also forecast crude steel production in China to decrease by 25% in 2009 and increase by 21%, 3%, and 2% in 2010, 2011, and 2012, respectively.
According to the World Steel Association, world apparent steel consumption (ASC) was expected to increase by 9.2% in 2010, after declining by 8.6% during 2009. China’s ASC was expected to increase by 5% in 2010, and was expected to account for 48% of world steel consumption. ASC in India was expected to grow by 12% in 2010. The U.S. ASC was expected to decline by 39% in 2009 and increase by 19% in 2010. In Japan and the CIS, the ASC was expected to increase by 16% and 8%, respectively, in 2010. The European Union ASC was expected to increase by almost 15% in 2010 after declining almost 33% in 2009, according to the European Confederation of Iron and Steel Industries.
Seven U.S. steel producers and the United Steelworkers Union filed an antidumping suit against China with the U.S. International Trade Commission and the U.S. Department of Commerce, covering $2.7 billion of steel imports into the United States. Steel producers contended that tariff increases were needed to help them survive the global recession. China intended to cut excess steelmaking capacity by consolidating its producers into three major steel groups. Also, China was planning to protect its steel industry by gradually raising import duties.
