Steel consumption may drop 3% this year, OECD reports

Total steel consumption may decline by 3% this year among oecd- member countries, the Paris-based Organization for Economic Co- operation and Development reports in The Steel Market in 1986 and the Outlook for 1987.

The downturn in consumption will reflect modest economic growth and the long-term structural decline in the relative use of steel because of greater efficiency in the use of materials generally and the net replacement of steel by other materials, says the oecd.

While steel demand is expected to decline this year in almost all oecd countries, in most non- oecd areas demand will likely be higher than last year, although in Latin America, the Middle East and Africa it will remain significantly below the levels recorded in earlier peak years.

A decline in production in the oecd area this year is expected to be 3 1/2% (not as great as in 1986), with the reduction likely to occur mainly in the United States, Japan and the European Community. Crude steel production world-wide this year is expected to total 712.2 million tonnes, down slightly from 714.3 million tonnes in 1986.

Crude steel production capacity in the oecd area continues to be reduced, but in 1987 the average rate of capacity utilization is likely to remain at 67%. In non-oecd areas, crude steel capacity and production continue to expand; this year, as in 1986, the fastest rate of growth is likely to be in China and the rest of Asia.

International trade in steel shrank in 1986, and this year significant further declines are expected in net imports into the U.S. and the centrally planned economies and in net exports by Japan.

There were 56,000 fewer jobs (about 5%) in the oecd steel industry last year. Since 1974, the number of workers has fallen by almost 850,000, or 43%.