previously expected decline 14.1%, but the problem of overcapacity is not going away. China's largest consumer and producer of steel in the world, the end of the year announced plans to reduce the old plants.

World Association of steel producers (World Steel Association, WSA) during the annual conference in Beijing unveiled an improved demand outlook for the global steel market. Significant improvement occurred as a result of strong growth in steel consumption in China, - said General Director of the Association Ian Christmas, noting that signs of improvement have appeared in the second half of 2009, the Association Experts predict that in 2010 the world steel consumption increased by 9 2%, to 1,206 billion tons

Chairman of Economic Committee of the World Association of steel producers, Daniel Novegil argues that the global recovery in demand for steel was stronger than expected in April 2009, Developing the economy will show a 17% decline in 2009 and an increase of 12% in 2010 . Apparent steel consumption in the developed economies will be reduced in 2009 to 34%, with recovery of 15% in 2010, - said Mr. Novegil. According to him, the association predicts that global consumption of steel will begin to grow again in 2010, but this growth will be moderate. As in the pre-crisis period, and in the near future, the economies of developing countries, particularly China, will be the main driver of global demand for steel, - says Novegil.

Improvements in the global steel market and banking analysts note. Director of commodity derivatives of the French bank Societe Generale Sebastian Castelli believes that the production of steel in the world must be restored in early 2010 against the backdrop of improvements in the global economy. The prices are now rising from the bottom - said Mr Castelli. Previously, experts germanskogo Deutsche Bank predicted that in 2009 the consumption of steel in the world can be reduced by 17% against a background of deepening of the current global crisis.

main consumer of steel in the world is China, whose share in total world steel consumption this year will amount to 47,7%. At the same time thanks to the government program to support the economy, China is also the largest producer, producing more steel than Japan, the United States and Russia combined. Until now, the high demand for steel in China was beneficial not only Chinese but also foreign producers of steel. However, the World Association of Manufacturers have predicted that in 2010 growth in demand for steel in China will slow. In 2009, apparent steel consumption in the country increased by 18.8% - up to 526 million tons in 2010, however, demand for steel in China will amount to only 5%, while worldwide the figure reaches 13%.

Global steelmakers are concerned that in the case of falling demand for steel in China, the Chinese have become surplus will swing on the world market, depressing prices and profits industry. According to the CISA (China Iron and Steel Association), China is expected to reduce domestic demand and tighter credit conditions, - said the head of the world's largest steel producer Arcelor Mittal, Lakshmi Mittal at the conference. The fact that China's proposal is already beginning to exceed demand, evidenced in the early decline in steel prices by some Chinese manufacturers. Thus, the largest steel maker Baosteel announced the reduction of the cost (since November), the main types of its products.

However, the Chinese government is already working on plans to reduce overcapacity in the steel industry in an attempt to limit oversupply, said Dan cylinder, CISA chairman and head of the Wuhan Iron Steel Group (the third largest steel producer in China). These plans include the closure of a number of outdated production facilities, intensification of mergers, as well as reducing the number of importers of iron ore. Specific plans, he said, may appear by the end of this year.

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