Taiwan Metals Report Q1 2012
Includes 3 FREE quarterly updates
The situation facing the Taiwanese steel industry has declined markedly over recent months as Chinese economic growth slows, prompting BMI to forecast a contraction in the sector in 2012 in its latest Taiwan Metals Report.
In the first 11 months of 2011, Taiwanese crude steel output was up 13.7% year-on-year (y-o-y) to 20.5mn tonnes (mnt). This put it on course for output of 22.4mnt, helped by healthy export orders. The country's basic metal and basic metal product export orders in the first 11 months of this year amounted to a value of US$28.2bn, up 15.0% y-o-y, although in November output was up just 2.5% y-o-y as the external market declined. We have also maintained our hot-rolled output forecast at 24.92mnt in 2011, with growth at 8.0% y-o-y. The industry is operating at around 85% full capacity with plenty of room for growth. Although growth was better than expected in H211, we believe that the inevitable contraction has simply been delayed rather than averted.
Industrial production has slowed and the outlook for the island's manufacturing sector continues to look bleak amid a deterioration in business conditions. Metals consumption in general will weaken as a result of stagnation and contraction in the country’s manufacturing sector. BMI forecasts domestic finished steel consumption falling 11% y-o-y to 16.64mnt in 2012, while steel exports will decline 6% to 10.34mnt in the same year. As a result of these trends and the higher base level caused by better than expected results in H211, we have revised down our crude steel output growth forecast from 10.0% to - 5.0% and our hot-rolled output growth forecast from 6.8% to -5.0%.
On the upside, we expect long steel to be supported by the government’s multibillion dollar projects in the transport and energy infrastructure subsectors. Added to this is the effect of the post-tsunami reconstruction effort in Japan, which should help to tighten the Asian market over the medium-term and offset any slowdown in Chinese consumption growth. This should boost EAF-based production, which relies on scrap and typically produces long products. However, with around half of Taiwan’s crude steelmaking capacity in EAFs, compared with an average of less than 20% for Asia and 28% globally, the island’s steel industry is vulnerable to a decline in scrap supplies.
The situation facing the Taiwanese steel industry has declined markedly over recent months as Chinese economic growth slows, prompting BMI to forecast a contraction in the sector in 2012 in its latest Taiwan Metals Report.
In the first 11 months of 2011, Taiwanese crude steel output was up 13.7% year-on-year (y-o-y) to 20.5mn tonnes (mnt). This put it on course for output of 22.4mnt, helped by healthy export orders. The country's basic metal and basic metal product export orders in the first 11 months of this year amounted to a value of US$28.2bn, up 15.0% y-o-y, although in November output was up just 2.5% y-o-y as the external market declined. We have also maintained our hot-rolled output forecast at 24.92mnt in 2011, with growth at 8.0% y-o-y. The industry is operating at around 85% full capacity with plenty of room for growth. Although growth was better than expected in H211, we believe that the inevitable contraction has simply been delayed rather than averted.
Industrial production has slowed and the outlook for the island's manufacturing sector continues to look bleak amid a deterioration in business conditions. Metals consumption in general will weaken as a result of stagnation and contraction in the country’s manufacturing sector. BMI forecasts domestic finished steel consumption falling 11% y-o-y to 16.64mnt in 2012, while steel exports will decline 6% to 10.34mnt in the same year. As a result of these trends and the higher base level caused by better than expected results in H211, we have revised down our crude steel output growth forecast from 10.0% to - 5.0% and our hot-rolled output growth forecast from 6.8% to -5.0%.
On the upside, we expect long steel to be supported by the government’s multibillion dollar projects in the transport and energy infrastructure subsectors. Added to this is the effect of the post-tsunami reconstruction effort in Japan, which should help to tighten the Asian market over the medium-term and offset any slowdown in Chinese consumption growth. This should boost EAF-based production, which relies on scrap and typically produces long products. However, with around half of Taiwan’s crude steelmaking capacity in EAFs, compared with an average of less than 20% for Asia and 28% globally, the island’s steel industry is vulnerable to a decline in scrap supplies.
Contents
Executive SummarySWOT Analysis
Taiwan Political SWOT
Taiwan Economic SWOT
Taiwan Business Environment SWOT
Global Market Overview – Steel Forecast
Table: BMI’s Steel Forecast
Table: Steel Price Data
Commodities Forecast
Copper
Aluminium
Lead
Nickel
Tin
Zinc
Regional Overview
Table: Top 10 Asian Steel Producers, 2009
Industry Forecast Scenario
Table: Taiwan’s Steel Industry, 2009-2016 (’000 tonnes)
Macroeconomic Outlook
Table: Taiwan – Economic Activity, 2011-2016
Competitive Landscape
Steel
Aluminium
Company Profiles
China Steel Corporation (CSC)
Global Assumptions
Table: Global Assumptions, 2009-2015
Table: Global And Regional Real GDP Growth, 2010-2013 (% y-o-y)
Table: Selected Developed Market Exchange Rates, 2010-2013 (average)
Table: Selected Emerging Market Exchange Rates, 2010-2013 (average)
Developed States
Table: Developed States Real GDP Growth Forecasts, 2010-2013 (% y-o-y)
Emerging Markets
Table: Emerging Markets Real GDP Growth Forecasts, 2010-2013 (% y-o-y)
Consensus
Table: Real GDP Growth Consensus Forecasts, 2011-2012 (%chg y-o-y)
Country Snapshot: Taiwan Demographic Data
Section 1: Population
Table: Demographic Indicators, 2000-2030
Section 2: Labour Market And Spending Power
Table: Employment Indicators, 2000-2005
Table: Consumer Expenditure, 2000-2005 (US$)
Table: Average Annual Manufacturing Wages, 2005-2012
BMI Methodology
How We Generate Our Industry Forecasts
Cross Checks Skip to top