CCR Magazine

CCRi banner ad
You are here  :Home arrow News arrow Steel overcapacity around the world: risk reaches a high in 2016
Contact Us Newsletter Signup RSS Feeds

Latest News Headlines

Headlines

 
Commercial Credit News

Headlines

 
Steel overcapacity around the world: risk reaches a high in 2016 PDF Print E-mail
Wednesday, 20 April 2016
In 2014, China accounted for 45% of the world's total steel production. Now, however, its appetite is waning, with a -3.3% contraction in 2014 and -5% consumption in 2015. Meanwhile, China’s production capacity has continued to increase, heightening the global imbalance between supply and demand. While global production is weakening (-3.1% at end February 2016) and one-third of steel production lines are at a standstill, supply is still abundant. This has resulted in strong pressure on prices, which are down significantly. China is now exporting its production surplus (+20% in volume in 2015), which is particularly weakening steel production structures in Europe, the United States and emerging countries.   

The Chinese economy is undergoing structural changes. Manufacturing is giving way to the expanding services sector in China’s growth model. The country’s domestic consumption of steel has already reached its peak and will continue to decline.

Coface has seen a gradual downgrading of credit risks in global metal production. The sector is the most at risk among the 12 structures assessed by Coface. It is now assessed as "very high risk” in Latin America, emerging Asia, the Middle East and Western Europe, and "high risk” in Central Europe and North America.

In fact, it is one of the least profitable sectors in the world (ranked 90th out of 94) and the deepest in debt. China's price competitiveness (especially for low-end steel) is weakening steel producers around the world. Current overcapacity is also weighing down on credit risks in China and corporate indebtedness is rising significantly.

OUTLOOK: A RETURN TO NORMAL IN 2018?
Nevertheless, the rebalancing of supply and demand could be possible from 2018. The first capacity reductions in Chinese production will begin to materialise. While emerging economies will have less success in catching up than in the past, their growing urbanisation and expanding middle classes will be new relays for growth. The three sectors that use the most steel continue to have positive perspectives over the medium term:

The automotive industryhas a substantial margin for progression in the emerging economies. For example, in India there are 100 autos per 1000 inhabitants (compared to 808 per 1000 inhabitants in the US);

Machineryis also benefiting from numerous growth relays, both in the emerging markets and in advanced economies;

Finally,construction activityshould take off again, thanks to the strong potential for urbanisation in most of the emerging countries.
 
CCRI
3 October - Guoman Tower Hotel, Central London 

CCRInteractive, in association with Marston Holdings , is the largest and leading one-day conference from the publishers of CCRMagazine – a truly national and international event for the credit industry.

This landmark event allows delegates to: Learn best practice of how to increase profitable sales in today’s economy. Understand the key compliance issues and how they will impact upon you. Discuss the legislative and regulatory framework and how it will effect you. Consider the potential effects of Brexit on your business. Discover the latest innovations in the market to improve your collections. Motivate your staff to achieve ever improved results.

To book to attend in 2017, contact Stephen Kiely  or Alison Lucas. To find out more about being part of this landmark event, please contact Gary Lucas
CCRI 

 Forums International Ltd

Forums International Ltd

 Attendance at your first meeting is free of charge, and please quote reference 'CCR2016' to receive the special 10% discount off of your first annual subscription.

Find out more here.

latest issue

CCR Cover

The latest edition of CCR Magazine, the leading editorial publication in the UK credit industry, is out.

Read the latest issue online

The Credit Excellence Awards

Awards 

Tuesday 3 October - Guoman Tower Hotel, Central London


Do not miss your chance to meet and network with the Winners and Finalists at the Credit Excellence Awards, in association with Hoist Finance.


To book your place to attend, please contact Alison Lucas.


subscriptions

CCR is the premier magazine for consumer and credit professionals. It provides an independent voice to the industry, breaking major news stories and running in-depth features.

As a magazine, it works with and campaigns on behalf of the credit industry to promote its importance as a centre of potential profit and business development to the wider business world.

Subscribe to CCR Magazine

CCR World Magazine


 

Providing information and analysis for thousands of senior credit professionals worldwide, every quarter.

Find out more

GTS Media Ltd
81 Cambridge Road
Southend-on-Sea
Essex
SS1 1EP

Registered in England No: 05483197