Analysis of Global Demand for Iron Source by Estimation of In-use Steel Stock

Abstract

The Utility of Stock hypothesis, which assumes that the in-use stock of constructional material is a function of GDP, was formulated and the clear correlation between the world steel stock and the GDP led to the estimation that the world demand for iron ore (primary iron) depends not on the volume of GDP but on the variation of GDP, as already reported. In this study, the world steel stock in use is computed. Sensitivity analyses are conducted to show the effect of lower reliable data such as the usage period (lifetime) of iron-containing final products. Clear correlation is found between the in-use steel stock and the steel stock. Hence, the Utility of Stock hypothesis is verified.

Prediction Model of Global Demand for Iron Source by Utility of Stock Hypothesis—Verification of Predictive Power and Outlook for Demand to 2050—

“…As already reported, 2) the relationship between the world steel stock in use and the world GDP shows two straight lines which is inflected in the year 1982 (Fig. 8).…”

“…As already reported, [1][2][3] we have proposed the Utility of Stock hypothesis which assumes that an in-use stock of constructional material is a function of GDP and found a clear correlation between the world steel stock and the world GDP and also a clear correlation between the world production of crude steel and the world production of primary iron. It is concluded that it is significant to predict the world demand of iron source based on the guiding principle that the production of primary iron is a function of the variation of GDP and the production of crude steel is a function of the production of primary iron.…”

“…This calls into question the validity of boundary unit such as country or region. This study and our preceding articles [1][2][3] advocate the Utility of Stock hypothesis that focus on not the relationship between flow and GDP but the relationship between stock and GDP. This enables us to rationalize the recent decoupling between the world growth of iron source demand and the economic growth with total world figures.…”

“…[1][2][3] When a mathematical model based on this result is used to predict the global demand for iron source, however, the time frame of an future estimator is different from that of regression analysis calculation, which is up to the present.…”

“…4) Despite the long history, our preceding articles [1][2][3] are original in the way that sensitivity analyses are conducted to deal with the uncertainty of the in-use stock estimates, the studies are based on the Utility of Stock hypothesis that is a new idea to relate the in-use stock to GDP, and the rational for the relationship between the world production of crude steel and the primary iron source is explained.…”