Is steel demand in 2008 stronger than we think? If yes, the answer probably lies in the unbelievable rise in steel intensity since 2002. In the past five years, real GDP growth has been faster than in the prior 20 years, with the ratio of investment to GDP, especially in the Developing World, also increasing substantially. The impact on steel demand has been quite positive since about 40% of the market for steel products is tied to construction and other 40% to capital spending.

This observation explains why the global economy, global investment and global steel demand have been growing at a faster rate since 2002 and why still relatively high growth rates seem likely in the next decade ( at least as long as inflation does not become a major problem).