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Company «Worldsteel»: steel industry is quite promising

24 June 2014

According to the CEO of the company «Worldsteel» Edwin Basson global steel industry is sufficiently developed, so that it has relatively stable long-term development prospects. The stumbling block in this sector may be slowing down the growth of production capacity in China and problems in the world economy as a whole.

Also, the negative impact can have a continuously increasing competition, related among producers reduction in the degree of differentiation in costs, the problems arising from toughen on environmental requirements, reduction of atmospheric emissions and the consumption of electricity and, in addition to the above, the underutilization of innovative development opportunities. Then Edwin Basson says that according to analysts until 2013 a large part of the population — about 1.5 billion people -. Will move to the city, that drags a need to expand the infrastructure, construction of additional residential buildings and transport lines for passenger traffic, increase food production. And, as a pattern, formed a stable demand in the medium-term future of steel. All these factors are taken together are prerequisites that will ensure the growth of the steel industry without any restrictions, because the steel market is not the primary raw material for the production of a product shortage. So there is no doubt that the steel industry will be able to meet the increased need has arisen in the material.

However, Alexey Mordashov, the main holder of «Severstal» shares, confidently says that about 67% of all steel companies in the world operating with negative margins and the crisis, which currently takes place in steel production, can take another 3 or 4 years.

Nevertheless, the world market there is an excess of iron ore, according to analysts in the current year, its size reached 72 million. Tons, while the annual trade volume amounted to 1.25 billion tons. According to analysts in 2015 this figure will rise to 175 million. Tons. The specialists of «Goldman Sachs» from January to April of this year, shipments from Australia to China totaled 165.2 million tonnes of ore -. APPG is more by 35%.

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