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Global steel market to reach $865.5 billion by 2020: MarketLine
time2017/03/13
The global steel market reached a value of $753.4 billion in 2015, representing a negative compound annual growth rate (CAGR) of 11.2% from 2011, according to data from research company MarketLine.
The global steel market reached a value of $753.4 billion in 2015, representing a
negative compound annual growth rate (CAGR) of 11.2% from 2011, according to data from
research company MarketLine.
The company’s latest report states that China is the largest steel producer globally, commanding 49.6% of total market value and exporting
more than the North American Free Trade Agreement (NAFTA) and European Union (EU) countries combined. As it accounts for almost
half of the global market, changes in the Chinese steel supply and demand impact the global market situation significantly.
“The key factor driving recent market contraction is the large oversupply of steel that has forced prices down. In 2015, as demand for steel
dropped in China, production volumes took a slump globally," said Goska Kafel, an analyst for MarketLine. "Additionally, China is exporting
its overcapacity below its costs to the rest of the world, adding pressure to other regions which also face overcapacity issues.”
Steel prices rose throughout most of 2016 as a protectionist backlash has prompted authorities in the US, the EU and other regions to
clamp down on cheap imports from China, the research report by MarketLine stated.
However, the enactment of tariffs and duties by other countries and regions could likely have the negative longterm impact of allowing
protectionism to become the standard, which may allow inefficient steel producers to have a safe haven, it added.
MarketLine forecast that the global market will grow with a CAGR of 2.8% between 2015 and 2020, reaching a value of $865.5 billion. The
end of the commodity boom, combined with restrained capital investment around the world are key cyclical factors contributing to the weak
outlook, according to the World Steel Association.
“China will keep its position as the largest producer and consumer of steel globally. However, as the country is under pressure to curb
production due to rising trade cases against its dumping, it is expected that the increased production of Chinese steel will serve domestic
demand more rather than flood international markets in 2017," said Kafel.
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