The long night is almost over for steelmaking, which will enjoy a strong recovery in 2010, the World Steel Association (WSA) predicted yesterday.

Exceptionally strong consumption in China means that demand for the steel output of the world’s mills will rise by 9.2 per cent next year, a recovery to 2008 levels, the association said.

Even the UK should get a big boost. After a near-collapse in the market this year, with demand falling by more than a third in Britain, steel use is expected to rise by 25 per cent next year.

Daniel Novegil, chairman of the WSA’s economic committee, said that the global recovery was stronger than the organisation had predicted in April.

The speed of the recovery appears to have surprised steelmakers, who began to fire up blast furnaces last summer after shutting down plants at the end of 2008. The Chinese Government’s huge financial stimulus mopped up much of the spare capacity and prices have begun to rise again, but the WSA added a note of caution to its forecast yesterday.

“Uncertainties and concerns regarding the resilience of the recovery still remain,” Mr Novegil said. “This uncertainty particularly exists for the Chinese economy in 2010, whose fast recovery in 2009 was largely enabled by such strong government stimulus policies.”

China’s steel use in 2009 is expected to increase by 18.8 per cent to 526 million tonnes, representing 48 per cent of world steel use. Without China’s rampant consumption, the association reckons that world steel demand would fall by 24 per cent this year. In April, the WSA predicted that global steel use would decline by 14.1 per cent but the effect of the Chinese stimulus has improved the forecast to a less dramatic global decline of 8.6 per cent in 2009.

European economies were badly affected by the financial crisis and steel use among the 27 European Union member states is expected to fall by a third in 2009, with a recovery of only 12 per cent overall in 2010.

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