SINGAPORE The outlook for
Asias steel industry remains stable on the expectation
that demand will increase modestly and there will be no
significant increases in steel capacity in China over the next
12 months, according to Moodys Investors Service.
The imbalance between supply and
demand for steel in Chinawhich accounts for more than 70
percent of steel production and consumption in the
regionhas been the key reason for the industrys
weak fundamentals, Moodys vice president and senior
credit officer Chris Park said. "Moodys expects this
imbalance to stabilize in 2013 as consumption rises modestly
and capacity addition slows."
Chinas demand for steel,
which bottomed out in the third quarter of 2012, should
increase by 2 to 4 percent in 2013 after growing about 2
percent this year, Park said. Recently approved infrastructure
projects and modest growth in exports will be the main drivers
for demand, he added.
The profitability of Asian
steelmakers will improve moderately over the next 12 months,
although it will remain significantly below historical
averages, according to a new Moodys report.
Moodys expects net steel
exports from China to grow by more than 20 percent this year
and to remain near that level in 2013, preventing profit
margins at Asian steel producers from improving
A version of this article was first
published by AMM sister publication Steel