German Steel Federation: Financial crisis reached steel industry, but growth will continue moderately
Performance of tomorrow - the motto of this year´s annual meeting of the German Steel Federation and the Steel Institute VDEh sounds pretty challenging in the light of the current worldwide economic situation. The financial crisis has reached the steel industry, according to the German Steel Federation. Anyhow, there is no need to be too pessimistic, because the steel branch is said to be "not unprepared".
Hans-Jürgen Kerkhoff: The German steel branch is "not unprepared".
Hans-Jürgen Kerkhoff: The German steel branch is "not unprepared".
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The president of the German Steel Federation, Hans-Jürgen Kerkhoff, characterises the German market situation as "still relatively robust", supported by an estimated crude steel production of 47.5 million t in 2008 instead of the forecast 48.5 million t. Consolidation, more efficient use of capacities, and massive investments especially in the German steel industry altogether set a profound basis to successfully cope with this situation. Furthermore, steel consumption per capita still remains on a low level in the growth areas of the world, and energy efficient solutions are only possible with huge amounts of steel.
Kerkhoff precautiously pointed out that the effect on the German steel market is not reflected by the third-quarter results. The latest steel figures available do, so far, not fully reveal the actual situation.
Steel demand has decreased worldwide since summer holidays. This is ascribed to two factors:
- the lowering demand in important customer branches, and
- steel manufacturers and traders show a much more careful ordering behaviour.
Consequently, steel producers have reduced their output, and the IV. quarter of 2008 is likely to see the first decrease in world steel production since 1998.
Although feeling the coming months to be abnormally afflicted with uncertainty, he states that the global steel market will continue to grow albeit moderately. Compared to last years, steel demand in 2008 will show another 2-% rise, mainly driven by road vehicle construction, but also due to high production volumes expected in machine construction, metal ware and steel construction, tubes and pipes.
Simultaneously, the worldwide downturn offers good chances, e.g. for raw material costs. Whereas iron ore and coking coal are still being kept on high-cost levels, scrap and alloying elements have recently begun to step down from their historic all-time-high. The next annual contracts for ore and coal are supposed to follow this trend, too, anyhow, they will unlikely return to previous low levels.
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