World Steel Association (worldsteel)€¦ · World Steel Association (worldsteel) Introduction....

Contribution to the G20 GFSEC meeting – 07 March 2018

World Steel Association (worldsteel)

Introduction

Antitrust guidelines

▪ Most nations impose constraints on the conduct of market participants through antitrust laws.

Violation of these laws can result in civil and criminal penalties. Agreements to fix prices, limit

production or divide markets are typical of the activities that most clearly violate antitrust laws.

▪ worldsteel has printed antitrust guidelines and these are read before all member attending

meetings reminding everyone of the rules.

▪ worldsteel activities must not serve as an opportunity for improper conduct among two or more

of its members, either during meetings or related social events.

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Contents

▪ Steel industry overview

▪ Steel industry sustainability

▪ Way forward

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GFSEC 6 policy proposals

I. Global challenge, collective response

II. Enhance market function (1) Refraining form market distorting subsidies and government

support measures

III. Enhance market function (2) Fostering a level playing filed in the steel industry

IV. Enhance market function (3) Ensuring market based outcomes in the steel industry

V. Encouraging adjustment and thereby reducing excess capacity

VI. Ensuring greater transparency as well as review, discussion and assessment of the

implementation of Global Forum policy solutions

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Policy principles agreed during November ministerial

Steel industry overview

Steel Industry passed an important demand inflection

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Evolution of steel demand, 1950-2017

RoW

China

former USSR

US, EU, Japan

Mt

CAGR 1950-1975

+5.0%

CAGR 1976-2000

+1.1%

CAGR 2001-2007

+6.7%

CAGR 2008-2013

+3.7%CAGR 2014-2017

-0.3%

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▪Source: worldsteel, steel demand crude steel equivalent

Steel industry sustainability

Industry sustainability – Significant Megatrends

▪ Landscape

▪ Climate change

▪ Geo-social shifts

▪ Automation

▪ Regime

▪ Circular thinking and impact

▪ Transparency

▪ Niche

▪ Industry structure

▪ Sectoral adjustment

▪ Energy & material efficiency

▪ Design for re-use

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Industry sustainability – Significant Megatrends

▪ Landscape

▪ Climate change

▪ Geo-social shifts

▪ Automation

▪ Regime

▪ Circular thinking and impact

▪ Transparency

▪ Niche

▪ Industry structure

▪ Sectoral adjustment

▪ Energy & material efficiency

▪ Design for re-use

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Regime trends

Steel intensity show the impact of product improvement

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100110120130

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1980=100

Steel intensity of GDP

Share of steel value added inGDP

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Source: worldsteel

Reduce

Reuse

Remanufacture

Recycle

Impact on steel demand

• Lower steel intensity

• Longer life of steel containing

goods

• Reduced demand for steel

containing goods

• Less scrap

Impact on raw materials

• Increase scrap supply

Circular economy principles will impact on steel demand

▪New applications to enable the circular economy

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Global OverviewSteel demand, finished steel (SRO October 2017 and MTF September 2017)

1 515.9 million tonnes, 1.0% growth

1 622.1 million tonnes, 7.0/ 2.8%* growth

1 648.1 million tonnes, 1.6% growth

1 865.0 million tonnes, 1.1% CAGR 2017-2035

2016

2017 (forecasts)

2018 (forecasts)

2035 (forecasts)

* : Growth rates based on adjusted Chinese crude steel production for 2016

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Summary: Manifestation of the new normal▪ Global steel demand will maintain moderate growth momentum with limited risks

on the back of the strong global economy

▪ But steel demand growth is expected to remain below GDP growth

▪ The divergence between the performance of the global steel industry and the

global economy could be the reflection of the megatrend forces, in particular, the

circular economy trend

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Source: worldsteel (steel demand, SRO October 2017), IMF (World Economic Outlook, October 2017)

Global GDP growth vs Steel Demand Growth

Regional Export/Import preference (1)

- Global regional trade = 300Mt

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EU OE CIS NAFTA OAm

Net Exports (Mt)

2006 2011 2016 2017i-ix

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Source: worldsteel

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AME PRC Jpn OAs Oc

Net Exports (Mt)

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Regional Export/Import preference (2)

- Global regional trade = 20%

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Source: worldsteel

Increasing Importance of Indirect Trade in Steel

▪ Volume of indirect exports of steel was equivalent in size to 70% of direct exports in 2014

▪ Globalisation and the specialisation of manufacturing contributed to growth of indirect exports

by 87% worldwide in the period 2000-2014

▪ Top 10 indirect exporters covered 69% of total

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2000 2005 2014

Mt

Direct exports

Indirect exports

▪Note. Indirect exports of steel, million tonnes (Mt), finished steel equivalent.

▪Direct exports of steel, million tonnes (Mt), finished and semi-finished steel products.

▪Source: worldsteel

Rank Country Mt

1 China 67.5

2 Germany 32.1

3 Japan 23.0

4 United States 22.3

5 South Korea 22.3

6 Mexico 13.9

7 Italy 13.0

8 Poland 9.1

9 Spain 8.9

10 France 7.9

▪Top 10 indirect exporters in 2014▪World direct and indirect exports of steel

Landscape trends

Trends in global age composition

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▪Source: United Nations. World Population Prospects

Trends in age composition of more developed countries

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Trends in age composition of less developed countries

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▪Source: United Nations. World Population Prospects

Level of development and urbanisation seem to be linked.

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▪Source: United Nations. IHSMarkit

Population and number of countries in groups with different

level of GDP/cap

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▪* 140 countries are included

▪Source: United Nations. IHSMarkit

Way forward

Future focus

▪ Embrace transparency

▪ Capacities

▪ Free market

▪ Volume to value

▪ Environmentally competitive product

▪ Focus on reusable solutions

▪ Design and solutions

▪ Value chain position

▪ Steel support modern society

▪ Base of sustainable society

▪ Viable CO2 solution

▪ Capture new growth cycles

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