Global crude steel production grew in the 2013 calendar year by 4.5% to 1,578 million tons, a substantial increase after the previous year’s modest gain of only 1.4%. The reason for the most recent, strong performance was again growth in the Asian region (+7.3% compared to the previous year), particularly China with a boost of 9.3%, which more than compensated the declining production figures in North America (–2.1%) and Europe (–2.2%) compared to the previous year).
As production figures in North America had already risen in 2012, when they declined in 2013, it was from a relatively solid basis, while the decline in Europe was a continuation of the downward trend that had prevailed since 2011, with its tentative low point in the summer of 2013.
Since September 2013, a twelve-month comparison has been showing an upward trend, also in Europe, with significant acceleration toward the end of the business year 2013/14 (March 2014 +7.0% compared to March 2013). The fact that inventories are at a normal level indicates that manufactured product is being absorbed by higher demand. However, the manufacturers could not translate these positive developments in the latter part of the business year with regard to volumes into higher prices. As a result of the chronic overcapacity in Europe, sharp competition for volume and capacity utilization persists between plants. This is a situation that will hardly be significantly mitigated by another economic recovery in Europe due to the dimension of the problem.
In this environment, the voestalpine Group’s previous strategy of investing in an extension of the value chain and of focusing on the most technologically sophisticated market segments in steel production itself has paid off to the extent that the Steel Division’s results are the benchmark in the European steel industry and that the Group overall can no longer be compared to traditional steel manufacturers with regard to how its results stack up against its competitors. The growth strategy is the consistent continuation of the course upon which the Group embarked successfully in 2001.