There was a significant decline in scrap regional demand during 2012 as well as in the better part of 2013, however the scrap metal pricing outlook for 2014 looks to be more promising, in line with U.S. economic growth more generally.


Global Steel Demand Growth

According to the Economics Committee Chairman at the World Steel Association in Brussels, Hans Jurgen Kerkhoff, continued recovery is expected in worldwide steel and scrap metal demands for 2014 because developed economies are getting back to positive growth.

Kerkhoff added that the major risks in worldwide economy (Chinese economy hard landing and the crisis in the eurozone) that have been identified in the last SRO (Short Range Outlook) issued April of 2013 are continuously stabilizing through the past six months.

The SRO for 2014 estimates that global steel use is going to grow by around 3.3 percent, which is expected to reach up to 1.52 billion tonnes.

Improved European Union Economic Conditions

One positive factor that could eventually lead to increase in demand for scrap metal use is the prediction that the economic conditions in most parts of Europe are going to be improved. Some positive increase in scrap metal demand and steel output numbers will certainly be very welcome by the European Union’s ferrous scrap recycling companies after almost two years of difficulties.

Expected Growth in Steel Production in Other Parts of the World

Aside from the expected increase of scrap metal and steel demands in the EU, there are also positive predictions regarding the possible rise in steel and scrap metal demands in other countries like in Brazil, India, China, and the US. Steel production in these countries, particularly in Brazil and India, have not performed well in 2012 due to structural and high inflation problems that have constrained the activities of steel using industries.

In 2013 though, India’s scrap metal and steel production increased by 3 percent (59.62 million tonnes) and is expected to grow more by 5.6% for 2014 because of the current elevated attempts to effectively implement structural reform programs in the country. The January to September 2013 period has seen this growth in the Indian steel production and it was recorded as second-best next to China, which recorded a significant 8 percent growth.

Brazil’s steel and scrap metal demands, on the other hand, is also expected to increase by 3.8 percent and according to the Brazilian Scrap Register, the country’ steel industry remains positive over the general 2014 outlook. State-funded social housing developments and infrastructure projects are seen as the motivating factors that could play significant roles in the growth in scrap metal and steel demands.

China’s stand is also going on a positive route as there is an anticipated 3 percent increase over the 2013 results (producing 66.8 billion tones, a significant 12.8 percent increase over the 2012 output). The result of this upbeat outlook for Chinese steel and scrap metal production is the Chinese government’s continued attempts at rebalancing their economy to hold investment activities back.

US steel use is also positively projected to rise by 3 percent for 2014, and this increase can be stimulated by the overall global economic improvements, as well as the potential growth in the residential, energy and automotive construction industries.

Better 2014 for the Global Scrap Metal Industry

Generally, the scrap metal industry is projected to enjoy a huge improvement in demands for 2014. Scrap metal and steel demands globally is expected to reach an overall average of 3.3 percent to 1.52 billion tons. This is indeed a very positive outlook and could be attributed to global scrap metal and steel demand pickup and the increasing contribution of the developed economies. Recycling.about



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