Balli Steel Anticipates Global Steel Recovery To Continue Into 2010
Released
on: December , 2009, 4:43 am
Author:
Balli
Industry: Industrial
Balli Steel, one of the world's largest privately owned
independent commodity traders, anticipates that the global steel market
will continue its recovery during 2010. Following a fall in apparent
steel usage of approximately 15% in 2009, Balli Steel believes that
usage could increase by up to 9% next year. However, consumption levels
are unlikely to reach their 2007 peak until 2012 and recovery is liable
to be driven by the Far Eastern markets, especially China, as European
markets continue struggling.
Nasser Alaghband, Director of Balli Steel commented: "We are
anticipating that the steel market will continue its recovery next year but growth
is expected to be moderate and driven by emerging economies, with China's influence
continuing to be critical. There is a danger that consumption growth will not match
the increased production capacity which has been created in recent years, which
could lead to the possibility of oversupply."
The economic downturn has severely affected demand for steel with apparent usage
expected to fall by -32.6% in 2009 to 122 million metric tonnes*. This fall in
consumption has led to a slowdown in production and Balli Steel estimates that many
of the mills across Europe are operating at between 40% and 60% capacity.
The global recession has led to property downturns across the European Union
resulting in an oversupply of both residential and commercial property which in turn
has led to a significant slow down in construction. With the construction accounting
for approximately 50% of global requirement, the property downturn has had a
significant impact on the steel industry across Europe, particularly in Portugal,
Italy, Ireland, Greece and Spain.
Projections from the World Steel Association suggest that steel usage across Europe
could grow by up to 12.4% in 2010. However, Balli Steel believes the industry still
faces a number of challenges with governments cutting spending on public sector and
infrastructure projects.
Steel consumption in the Middle East has fallen at a slower rate than in Europe with
usage falling by -9.8% in 2009 to 38,834 million metric tonnes*. The demand for
construction steel has fallen across the UAE, but Dubai has been hit particularly
hard due to a decline in the demand for property in the first quarter of the year.
Balli Steel reports that construction steel demand in Saudi Arabia is likely to
remain strong in the medium term as the country looks to develop good employment
prospects for its population.
China continues to dominate both the Far Eastern and global steel trading markets accounting for almost 49%
of world steel production as well
as approximately 50% of global consumption equating to 1.5 million tonnes per day.
There are signs of over production, but the Chinese government appears reluctant to
instruct the steel mills to reduce supply. The result may be an increase in exports,
despite existing trade tariffs, especially for galvanised steel.
India, has been largely sheltered from the global economic crisis but its steel
market has remained relatively subdued. The country's continuing economic
expansion, combined with growth in domestic consumer demand and infrastructure
projects should ensure that demand for steel in India will increase in the medium
term.
Other smaller Asian markets are also showing signs of growth and recovery.
-Ends-
Notes for Editors
* Source: World Steel Association
About Balli Holdings:
Balli Holdings is a large private, multi-national corporation, headquartered in
London, with offices in Dubai and other key business hubs around the world.
Balli was established in 1982 and operates a number of affiliated companies
specialising in commodity trading, industrial, real estate and private equity with
operations in over 20 countries. Together with its affiliated companies, Balli Group employs over 2,000 people
worldwide.
Balli Steel is the company's principal operating subsidiary, and is one of the
largest independent traders of steel in the world. Balli Steel provides raw
materials and steel to a number of market segments including steel mills, steel
service centres, pipe and tube makers, the oil and gas industry and other designated
end-user segments such as the packaging products industry. The company's real
estate operations currently has a significant property portfolio in the UK and
Middle East.
PR Contact:
Alex Lawrie
TTA Group
7 Hertford Street
Mayfair
London
W1J 7RH
020 7886 0300
www.balli.co.uk
2010
