Global metallurgy may return to growth

Global metallurgy may return to growth
The global steel industry, which saw a drop in production last year, is expecting a slight rebound this year, despite waning Chinese demand and as low metal prices are challenging producers.

Global crude steel production will grow 0.15 percent in 2016, analysts said, driven by growth in the US and Europe, offsetting output declines for the second straight year in China, which produces nearly half of all steel. A number of US and EU anti-dumping trade cases target countries such as China and Russia, could raise domestic prices of steel companies, but effectively block some imports.

Experts believe that “This will continue to be a challenging year for global steel companies. Profitability and price levels are still unsatisfactory and there is little hope for short-term improvement. ” Four of the world's largest producers - ArcelorMittal, US Steel, SSAB in Sweden and Tata Steel in India - have had a negative outlook on Standard & Poor's since November.

Some relief may come from the reversal of the wave of cheap exports from China. China's production is expected to contract 2.2 percent, while its outbound shipments will remain stable or decline in 2016 after a 20 percent jump last year.

The US steel industry is expected to grow 3 percent this year after falling 10.5 percent. A more modest 0.9 percent growth is projected for the EU, which saw a 1.8 percent cut in production last year.