MEPS usually analyse the developments related to the steel industry worldwide in terms of production, consumption, supply and demand. The following article is an executive summary of such an analysis. The gloom in the steel industry has been overdone. We continue to be quite bullish about long term steel demand worldwide. This analysis shows that global consumption to 2006 will be higher than the trend recorded in the final decade of the last century. Yes - 2002 will be another poor year for the industry. However, if we examine past tendencies, the recovery should commence in 2003 and pick up in intensity in subsequent years. The main problems of the industry are not on the demand side. Many of the difficulties were created by the suppliers. Most of them have been parochial in their assessment of demand to justify investment decisions. In recent years, the mills operating in regions with a deficit of production, have installed considerable amounts of new capacity - substantiated by an attempt to become self sufficient in manufacture. These steelmakers have completely ignored the fact that a steel surplus of 70 million tonnes is generated in other areas of the world - i. e. in Japan, former USSR and South America. This cannot be removed without inflicting serious financial difficulties on the mills in these regions.
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