Trends and developments in long-term steel demand – The intensity-of-use hypothesis revisited
Considering the past few years rapid increase in the demand for minerals and metals, mainly stemming from the strong economic growth in China and India, an understanding of the historical development of steel demand is of importance. The purpose of this paper is to analyze the trends and developments of steel consumption in the world by applying the so-called Intensity-of-Use (IoU) method. The empirical analysis is performed using steel consumption and GDP (in constant 2005 US Dollars) data for 61 countries over 42 years. The results show that the IoU hypothesis does not hold for the whole panel, but when dividing the sample into three income groups we find that the IoU hypothesis holds for the Middle income group, indicating that the countries in this income group have experienced the move from an industrialization phase towards a more service based economy in the time period investigated. However, when taking into account time series properties and applying panel unit root tests, the variables are confirmed as non-stationary. A panel cointegration test shows further that the variables are cointegrated, and an ECM model has been performed to test the IoU hypothesis. The results confirm that the IoU hypothesis holds for the Middle income group. Regarding the estimated turning point this is identified at a GDP per capita level of about 19,000 US. There are thus many countries that are far from the level of GDP per capita when steel IoU starts to decline. However, conclusions regarding the turning point should be made with caution.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Ignacio Guzman, Juan & Nishiyama, Takashi & Tilton, John E., 2005. "Trends in the intensity of copper use in Japan since 1960," Resources Policy, Elsevier, vol. 30(1), pages 21-27, March.
- Jaunky, Vishal Chandr, 2011. "The CO2 emissions-income nexus: Evidence from rich countries," Energy Policy, Elsevier, vol. 39(3), pages 1228-1240, March.
- Tcha, M. & Takashina, G., 2002. "Is world metal consumption in disarray?," Resources Policy, Elsevier, vol. 28(1-2), pages 61-74.
- Pesaran, M.H., 2003.
"A Simple Panel Unit Root Test in the Presence of Cross Section Dependence,"
Cambridge Working Papers in Economics
0346, Faculty of Economics, University of Cambridge.
- M. Hashem Pesaran, 2007. "A simple panel unit root test in the presence of cross-section dependence," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 22(2), pages 265-312.
- Westerlund, Joakim, 2005.
"Testing for Error Correction in Panel Data,"
2005:11, Lund University, Department of Economics.
- Antonio Focacci, 2007. "Empirical analysis of the relationship between total consumption-GDP ratio and per capita income for different metals: The cases of Brazil, China and India," International Journal of Social Economics, Emerald Group Publishing, vol. 34(9), pages 612-636, September.
- Roger Perman & David I. Stern, 2003.
"Evidence from panel unit root and cointegration tests that the Environmental Kuznets Curve does not exist,"
Australian Journal of Agricultural and Resource Economics,
Australian Agricultural and Resource Economics Society, vol. 47(3), pages 325-347, 09.
- Perman, Roger & Stern, David I., 2003. "Evidence from panel unit root and cointegration tests that the Environmental Kuznets Curve does not exist," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 47(3), September.
- Pesaran, M. Hashem, 2004.
"General Diagnostic Tests for Cross Section Dependence in Panels,"
IZA Discussion Papers
1240, Institute for the Study of Labor (IZA).
- Pesaran, M.H., 2004. "‘General Diagnostic Tests for Cross Section Dependence in Panels’," Cambridge Working Papers in Economics 0435, Faculty of Economics, University of Cambridge.
- M. Hashem Pesaran, 2004. "General Diagnostic Tests for Cross Section Dependence in Panels," CESifo Working Paper Series 1229, CESifo Group Munich.
- Narayan, Paresh Kumar & Narayan, Seema, 2010. "Carbon dioxide emissions and economic growth: Panel data evidence from developing countries," Energy Policy, Elsevier, vol. 38(1), pages 661-666, January.
- Roberts, Mark C., 1996. "Metal use and the world economy," Resources Policy, Elsevier, vol. 22(3), pages 183-196, September.
- Humphreys, David, 2010. "The great metals boom: A retrospective," Resources Policy, Elsevier, vol. 35(1), pages 1-13, March.
- Jaunky, Vishal Chandr, 2012. "Is there a material Kuznets curve for aluminium? evidence from rich countries," Resources Policy, Elsevier, vol. 37(3), pages 296-307.
- Boum-Jong Choe, 1991. "Global trends in raw materials consumption," Policy Research Working Paper Series 804, The World Bank.
- Canas, Angela & Ferrao, Paulo & Conceicao, Pedro, 2003. "A new environmental Kuznets curve? Relationship between direct material input and income per capita: evidence from industrialised countries," Ecological Economics, Elsevier, vol. 46(2), pages 217-229, September.
When requesting a correction, please mention this item's handle: RePEc:eee:jrpoli:v:39:y:2014:i:c:p:134-143. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.