According to its short range outlook released in April, the World Steel Association (worldsteel) has forecast that global steel demand will rise by 1.3 percent in the current year to 1.73 billion metric tons, while predicting a further rise of one percent to 1.75 billion metric tons in 2020, both year on year.
Commenting on the outlook, Saeed Ghumran Al Remeithi, chairman of the worldsteel economics committee and also CEO of UAE-based steelmaker Emirates Steel, said, “In 2019 and 2020, global steel demand is expected to continue to grow, but growth rates will moderate in tandem with a slowing global economy. Uncertainty over the trade environment and volatility in the financial markets have not yet subsided and could pose downside risks to this forecast.”
Chinese steel demand remains robust owing to government stimuli
Chinese steel demand continues to decelerate as the combined effect of economic rebalancing and trade tension is leading to slowing investment and sluggish manufacturing performance. In 2019, the government is likely to heighten the level of stimulus, which is expected to boost steel demand. In 2020, a minor contraction in Chinese steel demand is forecasted as the stimulus effects are expected to subside, the worldsteel report noted.
Steel demand growth in the developed world forecast to slow down
Worldsteel expects steel demand growth in the developed economies to further decelerate to 0.3 percent in 2019 and 0.7 percent in 2020, reflecting a deteriorating trade environment.
According to worldsteel, in 2019 the US growth pattern is expected to slow with the waning effect of fiscal stimulus and a monetary policy normalization, demand for steel in the major EU economies (especially in those more export-dependent) is expected to grow more slowly in 2019 amid a deteriorating trade environment and uncertainty over Brexit. Steel demand growth in the EU is expected to improve in 2020, dependent on a reduction in trade tensions.
Meanwhile, in 2019 and 2020 steel demand in Japan is likely to contract slightly due to a moderation of construction activities and decelerating exports despite the support provided by public projects. Steel demand in South Korea is expected to continue declining in 2019 due to toughened real estate market measures and a deteriorating export environment. A mild recovery is expected in 2020.
Worldsteel also stated that the Turkish economy is still reacting to the currency crisis of August 2018, which led to a contraction in steel demand. This is expected to continue into 2019, with some stabilization in 2020.
According to worldsteel, steel demand in the emerging economies excluding China is expected to grow by 2.9 percent and 4.6 percent in 2019 and 2020 respectively.