Steel industry role in future development path SEAISI Conference & Exhibition, June 2018, Jakarta, Indonesia

Transcription

1 Steel industry role in future development path 2018 SEAISI Conference & Exhibition, June 2018, Jakarta, Indonesia

2 Disclaimer This document is protected by copyright. Distribution to third parties or reproduction in any format is not permitted without written permission from worldsteel. worldsteel operates under the strictest antitrust guidelines. Visit worldsteel.org\about us for detailed antitrust guidelines. 2

3 Content About World Steel Association Global steel industry Focus on ASEAN Steel industry and industrialisation process Summary 3

4 About World Steel Association

5 World Steel Association (worldsteel) worldsteel represents over 160 steel producers (including 9 of the world's 10 largest steel companies), national and regional steel industry associations, and steel research institutes. worldsteel members cover around 85% of world steel production worldsteel is active in key areas of interest to the steel industry, including: automotive, climate change, communications, construction, life cycle assessment, raw materials, safety and health, steel market analysis, steeluniversity, sustainability, and technology and environment worldsteel goals: To act as the focal point for the steel industry providing global leadership on all major strategic issues impacting the industry, particularly focusing on economic, environmental and social sustainability Deliver benchmarking analysis and drive global improvement initiatives in the areas of environmental protection, technology, safety and people development Promote global market development opportunities for steel and promote steel to the world at large Provide on a timely basis world-class economic data and analysis on the global steel industry and its value chain, as well as assessments on life cycle aspects of steel Increase awareness, understanding and support for the steel industry amongst all external stakeholders and key target audiences worldwide Promote market competition that is free of government interventions preventing fair trade 5

6 Benefits for worldsteel Members Access the worldsteel extranet, a password protected website available exclusively to members that provides details of all our programmes, activities and campaigns Benefit from worldsteel s member-only data, reports, publications, case studies and authoritative works on specialist subjects including the latest technical and economic data on industry trends and performance affecting the global steel industry Become involved at an international level in common market development programmes and initiatives Network with other steel industry professionals from around the world at meetings, events and the conferences organised by worldsteel Join major industry wide working parties, expert groups and committees in worldsteel Send high-potential employees as Fellows to worldsteel to work on specific projects and gain knowledge of the industry at a global level More information on worldsteel website, link here 6

7 Membership today covers every region of the world 7 7

8 Global steel industry

9 Importance of steel in economy Steel, taking into account its complexity and variety, is one of the most used products in the world after coal, cement, oil and timber Steel is used in every important industry; construction, infrastructure, automotive and transportation, packaging and machinery, domestic appliances Production of steel and other commodities 2016 Steel use by sector 2016 Aluminium Steel Timber Oil Cement Coal Mt Source: worldsteel, USGS, OECD, BP, FAOUN Source: worldsteel 9

10 Global steel demand continues broadly shared recovery Steel demand, finished steel (Short Range Outlook April 2018) In short term, global steel demand will maintain moderate growth with limited risks on the back of the strong global economy Steel demand growth to stay below GDP growth million tonnes, 4.7% / 2.4%* growth 2018 (forecasts) million tonnes, 1.8% growth 2019 (forecasts) million tonnes, 0.7% growth * : China: based on worldsteel adjusted figures Source: worldsteel 10

11 but post crisis recovery quite diverse across countries Steel demand, finished steel (Short Range Outlook April 2018) Steel demand recovery path 2007= World Developed Economies Emerging & Developing Economies excl. China China adjusted* Source: worldsteel 11

12 Steel industry is moving to low growth zone Steel demand is at another inflection point which may be followed by a prolonged period of low growth (to reach an estimated 2055 Mt in 2035) Steel capacity increased faster than production Steel demand, Production and capacities, Mt RoW China former USSR US, EU, Japan Golden era +5.0% Stagnation +1.1% China post peak? 1.0% +3.7% +6.7% 2000= Mt Mt 2017 Capacity, World Production, World Source: worldsteel, steel demand crude steel equivalent Source: OECD, worldsteel, crude steel 12

13 Steel demand is facing new challenges Rising income inequality threatening growth and middle class base Deceleration of population growth and ageing population in developed economies Premature deindustrialisation of newly developing countries Spreading circular economy concept and impact on steel demand Digitalisation trend 13

14 Focus on ASEAN

15 Growing importance of ASEAN steel demand Steel demand, finished steel (Short Range Outlook April 2018) In Steel demand in ASEAN countries grew yearly by 6.6%, much faster than world average In all ASEAN countries construction, especially infrastructure is a major driver of steel demand Manufacturing playing role in Thailand, Malaysia and Vietnam Emerging markets of Myanmar and Cambodia 2000= Steel demand evolution share in World total: 4.9% World ASEAN (5) 2019 Steel demand rank, 2019 Country Rank Mt China United States India Vietnam Thailand Indonesia Philippines Malaysia Source: worldsteel ASEAN (5): Indonesia, Malaysia, Philippines, Thailand, Vietnam 15

16 Is growth in ASEAN (5) steel intensive? Steel demand, finished steel (Short Range Outlook April 2018) Growing steel demand per capita in the most ASEAN countries, supported by domestic use Relatively low level of steel demand in GDP, except of Vietnam, compared with China, stagnating in last decade Steel demand per capita Steel intensity of GDP kg World Em & developing countries ASEAN (5) Indonesia Malaysia t/ mln USD Philippines Thailand Vietnam Source: worldsteel, IHS Markit ASEAN (5): Indonesia, Malaysia, Philippines, Thailand, Vietnam 16

17 Steel industry and industrialisation process

18 Industrialisation and steel in Global Value Chains Development of global supply chains by MNEs (enabled by trade liberalisation and a decrease in logistic costs) opened doors for developing countries to industrialise by being incorporated into their global supply chain Industrialisation may progress in a shorter period of time with a limited number of manufacturing sectors which become a part of global value chains Value accumulation through production steps Backward and forward linkages of steel industry in value chain are important Source: OECD 18

19 Cascading and catch up in industrialisation The pattern of successive industrialisation and deindustrialisation in a global context has generated cascading of industrialisation from advanced to developing economies In this process latecomers benefited by adapting newly available technologies. The catch up process has become shorter over time thanks to globalisation and information technologies Manufacturing, % to global Source: IHS Markit 19

20 Industrialisation pattern impacts steel trade 474 Mt of steel products crossed boarders in 2017, i.e. more than 30% of steel demand Globalisation and the specialisation of manufacturing contributed to growth of direct and indirect exports worldwide Domestic steel use could be efficiently supplied by imports of quality material Emergence of manufacturing hubs in developing countries might not require an increase of domestic steel supply World direct and indirect exports of steel Source: worldsteel Mt Direct exports Indirect exports

21 ASEAN (5) direct and indirect net importer of steel All ASEAN countries are net importers of steel products Among ASEAN (5) only Thailand is net exporter of steel containing goods Increasing role of indirect exports of automotive in Thailand and Indonesia Indirect trade in steel Mt Indonesia Mt Malaysia Mt Philippines Mt Thailand Mt Vietnam Source: worldsteel Exports Imports Net exports 21

22 Summary

23 Summary Steel remains vital to modern society and will remain important in the commodity space Megatrends are shaping the future of steel industry, bringing challenges and offering opportunities Industrialisation can take various forms and is not necessarily steel intensive Share of ASEAN countries in global steel demand is about 5% and growing In short term, global steel demand will maintain moderate growth with limited risks on the back of the strong global economy In the long term, global steel demand is moving towards low growth zone Current installed capacities globally are sufficient to meet steel demand until

24 Thank you for your attention. For further information contact: Dr Edwin Basson Director General World Steel Association worldsteel.org

25 worldsteel.org