The World Steel Association has released its Short Range Outlook for 2014 and 2015. worldsteel forecasts that global apparent steel use will increase by 3.1% to 1,527 million tonnes in 2014 following growth of 3.6% in 2013. In 2015, it is forecast that world steel demand will grow further by 3.3% and will reach 1,576 million tonnes.

As the global economy and steel industry totters to recovery after the 2008 collapse a new emerging pattern portends to disturb the dynamics. After minor hiccup in 2010 and 2011 the next 2 years (2012 and 2013) was submerged in depression.

Defying all forecasts market never even came close to recovery. Leaving aside the backwaters of Europe and USA even the effervescent Chinese steel market wavered on credit tightening and slow economic growth. Blue eyed BRIC nations had led the demand growth amidst depths of recession and provided sustenance to industry seems fading light in the last 2 years. Dipping economic growth and severely mauled local currency has put the demand and economies on tenterhooks in these regions compelling mills to look for alternate markets.

Even though the residual demand kept the life line intact surplus volumes being generated from new capacities in India and overcapacity in China get churning out volumes with impunity. If the domestic market in most of these regions slumped recalcitrant mills in China burdened inventory levels. Indian import dipped by 31% and export fostered by 4.1%. A similar trend was demonstrated by China. Undoubtedly weakening currency catalysed the trend nonetheless it was fight to finish and evaporating advantages for mills.

World had its share of political turmoil apart from economic misery. MENA nations viz., Libya, Egypt etc underwent political upheavals shattering the economies. Middle East market after sliding into debt hole and shattered construction sector redeemed gradually with new infrastructure projects in Saudi Arabia. Even the oversupplied UAE market has off late shown recovery in demand from the construction sector. Algeria has exhibited stable demand all through providing succour to Southern European mills.

WSA study reveals a similar pattern showing a distinct shift in demand growth towards MENA and MEA nations in 2013 and 2015. Remarkably the apparent steel usage has shown distinct growth in MENA and MEA region during this period. Whereas in MEA the growth is from -1.1% in 2013 to 9.5% in 2015 in the MENA it is from 0.9% in 2013 to 9.4% in 2015.

On flip side hitherto bastions of steel consumption and production viz., BRIC nations it drops from 5.4% to 3% .Surprisingly China has shown collapse in consumption from 6.1% to 2.7% . 

Even though slump in demand from BRIC nations is not surprising in light of sluggish economic growth, depreciated currency and high inflation resulting in tight credit policy the resounding growth in demand from MENA region is heart warming. In volume terms though the growth might small compared to even emaciated demand from saturated developed market and struggling BRIC market it certainly gives a new direction for the industry to set its priority and follow tactical marketing strategies.

It is expected that BRIC nations are down but not out .They are expected to turn the corner sooner rather than latter with enormous potential demand from infrastructure, construction and auto sector. Irrespective of forecast there is always an element of surprise in economy and steel sector with dynamics getting influenced by change in sentiments and emergence of political crisis. However such bumps cannot be trend.