Global steel demand will increase by 0.2% to 1.501 billion t in 2016, according to the latest forecast from the World Steel Association (worldsteel), after a 3% fall in demand in 2015.
In 2017, worldsteel expects demand to grow again by 0.5% - but also warns that the steel industry faces increasing uncertainty driven, while weak investment globally will continue to hold back a stronger demand recovery.
“The steel industry environment remains challenging with escalated uncertainties driven by geopolitical situations in various parts of the world,” said T.V. Narendran, Chairman of the worldsteel Economics Committee. “However, a better than expected forecast for China, along with continued growth in emerging economies, will help the global steel industry to move back to a positive growth path for 2016 and onwards.”
Steel demand growth in emerging and developing economies outside of China is expected to accelerate to 4% in 2017 on the back of demand from India and ASEAN countries.
Chinese demand – although falling by 1% this year and 2% in 2017 – has recovered since worldsteel’s last forecast on the back of government stimulus measures that boosted the infrastructure, real estate and auto industries. Chinese demand will remain fragile, however, and a key downside risk to worldsteel’s forecast as its economy transitions away from investment-led growth towards services and consumption.
In developed countries, steel demand is projected to increase by 0.2% this year and 1.1% in 2017 despite uncertainties around the impact of Brexit and weakness in US demand growth on the back of a strong dollar and collapse in shale-related investment.
Structural issues in Japan continue to weigh down demand growth there, not helped by currency appreciation since the Brexit vote.
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