TOKYO - Worldwide steel production may plateau over the next five years as a result of environmental pressures and smaller demand increases, one of the world’s top steelmakers said in a report Monday.
JFE Steel of Japan told the Financial Times that annual output would rise as high as 1.6 billion tons by the middle of the decade and then stay roughly constant for 5-10 years.
The flattening of production would result from shortages of key resources as well as the likelihood of only relatively small rises in demand, JFE chief executive Eiji Hayashida told the newspaper.
"In this environment, the pressures will be on steel companies to move to more advanced and valuable forms of steel to suit the needs of new industries, rather than add to production volumes," Hayashida said.
The biggest hindrance to future output rises, according to the JFE chief, would be growing constraints on water and energy supplies amid deepening worries about climate change.
Many steelmakers were also concerned about their ability to pass on to customers the large recent increases in iron ore prices.
This year JFE expects to make 30 million tons of steel, with the figure likely to rise to 33 million tons in 2011 following plant expansions, the Financial Times said.
The World Steel Association trade group opened its annual conference in Tokyo on Monday.
