Balli Steel Reports China Dominating Global Steel Market
on: October 23, 2009, 4:30 am
Steel, one of the world's largest privately owned independent
commodity traders, reports that China is expanding into the iron
ore market and increasing its steel production capacity, against
a backdrop of declining worldwide production.
from the World Steel Association demonstrate that global steel
production declined by 18.1% year-on-year in August 2009 to 758
million tonnes. In contrast, crude steel production in China increased
by 5.4% over the same period. China now accounts for almost 49%
of world steel production as well as approximately 50% of global
consumption which equates to 1.5 million tonnes per day.
Steel estimates that Chinese steel production already stands
at over 400 million tonnes for the first 7 months of this year
compared with 560 million tonnes during the whole of 2008 and
only 200 million tonnes as recently as 2000. Domestic consumption
of steel has also increased sharply in recent years from just
25% of global production 10 years ago to nearly half today. However,
increased supply has enabled China to become one of the leading
exporters of steel, joining the ranks of the EU and Japan, with
exports exceeding 20 million tonnes.
Steel highlights that three factors are currently driving China's
growing dominance in the global steel market. The first is the
scale of domestic demand for both industrial and construction
steel, which is currently evenly balanced, with the latter a reflection
of the property boom in leading cities such as Shanghai, Beijing,
Tianjin, Guanzho and Hong Kong. Real estate development grew by
10% in the first half of 2009 and automobile manufacturing grew
by 16.4% during the same period resulting in increased demand
second factor is that the depreciation of the US Dollar against
the Yen and other world currencies is now reversing. In addition,
other countries, such as Indonesia, are also seeing their currencies
strengthen which is enabling their economies to stabilise adding
to the demand for steel products.
final driver is that the slight upturn in demand, combined with
the fact that destocking has occurred, has led to an upward pressure
on prices. Steel billet prices have risen from $300 per tonne
two months ago to current levels of $450 per tonne.
Alaghband, Director of Balli Steel commented: "Both consumption
and production of steel in China remains strong against a global
backdrop of falling supply and continuing uncertainty in demand.
China's dominance of the global steel market is an indicator of
the wider strength in the Asian market which has also seen an
increase in production in other countries such as India and rising
exports in Japan, albeit at lower levels than 2008."
Balli Holdings is a large private, multi-national corporation
chaired by Vahid
Alaghband and headquartered in London, with offices in Dubai
and other key business hubs around the world.
Group 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 employs over 2,000
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 have a significant property portfolio
in the UK and Middle East.
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