Global steel production may plateau in 5 years

Photo: Reuters

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.

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Experts call for new FDI strategy

Experts have called on authorities to provide strong, clear conditions, not merely open offers for foreign investors, before granting FDI licenses.

The new concept in luring foreign direct investment (FDI) was prompted by the fact that a number of major FDI projects have had their licences revoked or have been liquidated and shifted to other investors due to slow deployment or inefficient operations.

Prof. Dr. Nguyen Mai, the country’s leading expert in FDI, said the FDI strategy should focus on quality and efficiency, sustainable development, minimal carbon emissions and commitments to transfer advanced technology and skilled personnel.

He said that if advanced technology was applied to steel production, the industry may save up to 40 percent of energy and cut by half the emission of carbon to the environment.

These figures are very significant at a point when Vietnam is popular with the major world producers in steel production, which is always a leading energy guzzler, Mai pointed out.

Dr. Nguyen Minh Phong from the Hanoi Institute of Social Economy warned of risks if authorities care only about economic interests.

Management agencies and local administrations should take into account national security during the FDI project licensing procedures, especially in regard to those projects using vast areas of land, afforestation and mining located in strategic positions, Phong said.

For all these reasons, experts called on responsible agencies to make public both conditions and offers or take initiative in gaining information about foreign investors before granting licences.

These steps are necessary to avoid “bad” or “virtual” projects, and being able to apply incentives to those projects that are proven to be positive and sustainable, they argued.

The Foreign Investment Department estimated that Vietnam is expected to attract some US$21 billion in FDI and disburse between $14 and 15 billion in 2010.

 

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