Despite the lingering risk of price fluctuation in raw materials, the global steel industry will see a 7 to 10 percent increase in demand next year over this year, according to a report by the International Iron and Steel Institute (IISI) on Monday (Oct. 3). 

The brisk projection was made in the IISI's annual short-range outlook for steel demand, issued at its 39th annual conference at the Grand InterContinental Hotel in Seoul. 

``Apparent steel demand is forecast to grow 1,040 to 1,053 million tons in 2006 from a total of 972 tons in 2004. This is a growth of 4 to 5 percent over the two-year period,' IISI Secretary General Iran Christmas said in the opening session. 

``The strongest growth continues to come from China, the world's largest steel consumer, which should see a 10 percent increase in steel demand in 2005 and a further 7 to 10 percent growth next year.' 

But he added that the cost of raw materials and energy continue to represent a major challenge to the world steel industry. 

The global steel industry, which once suffered from a massive supply and demand gap four years ago, has enjoyed ``a new era of steel' since steel demand exploded in emerging economies, including China, India, Russia and Brazil, in 2003.