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DiMicco wary of global overcapacity, slow growth in 2012 - 11 October 2011

Nucor CEO Dan DiMicco sees a few bright spots on the global steel industry's near-term horizon, but the head of the largest steelmaker in the US remains "pessimistic" regarding prospects that 2012 will be a better year than this one.

"I am somewhat pessimistic due to the very slow growth in the US, the chance for a recession in Europe, and the slowing economies of the developing world," DiMicco told Steel Business Briefing on the eve of the World Steel Association's 45th annual conference this week in Paris.

"Energy and infrastructure should see increased spending, and hence more steel consumption. Construction is at a bottom with slow growth forecast for 2012. Automotive should be better, but steel capacity is more than demand requires."

Looking ahead through year-end and into 2012, DiMicco – who also serves as chairman of the American Iron and Steel Institute – cited "excess capacity, by far, and of course the illegal dumping of steel which seems to always follow," among his areas of greatest concern.

"Next would be the slowing of growth globally and the slow growth in the US," he said. "The two are of course connected, as overcapacity comes from both overbuilding and the reduction of demand in a slowing global growth scenario, which seems to be playing out."

As for US production and capability utilization next year, DiMicco said there will likely be only modest growth, with "maybe an increase of 5-8% or 76-79% utilization. "The steel industry goes as the general economic growth goes, and that is forecast to be slow growth in 2012," he said.

 

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