World Steel Association: Global steel demand will reach 1.735 billion tons this year
According to Xinhua News Agency, the World Steel Association recently released a short-term steel demand forecast for April this year, saying that global steel demand continues to grow against the backdrop of slowing economic growth.
According to forecasts, global steel demand will reach 1.735 billion tons this year, an increase of 1.3%. Next year, steel demand is expected to grow by 1.0% to 1.752 billion tons.
According to the relevant person in charge of the World Steel Association, global steel demand is expected to continue to grow this year and next, but the growth rate will decline as the global economy slows down. The uncertainty of the trading environment and the volatility of financial markets have not yet diminished or will pose downward risks to current forecasts.
Last year, global steel demand grew by 2.1 percent, slightly slower than in 2017. This year and next, despite the severe global economic environment, global steel demand is expected to continue to grow. The slowdown in China's economy, the slowdown in global economic growth, the uncertainty brought about by trade policies, and changes in the political landscape in many regions may weaken business confidence and affect investment growth.
It is predicted that the Chinese government may step up its stimulus efforts this year, and steel demand is expected to be boosted. However, next year, as the stimulus effect weakens, China's steel demand will decline slightly.
However, steel demand in emerging economies (excluding China) is expected to increase by 2.9% and 4.6% respectively this year and next. Among them, after experiencing the double impact of the banknote order and the implementation of the Goods and Services Tax (GST), the Indian economy is now expected to return to rapid growth in the second half of the year after the general election. Although the fiscal deficit may put pressure on public investment to a certain extent, the continued advancement of a series of infrastructure projects may support steel demand growth of more than 7% this year and next. It is expected that the demand for steel in developing countries in Asia, excluding China, will increase by 6.5% and 6.4% respectively this year and next, making it the fastest growing region in the global steel industry. In the ASEAN region, infrastructure construction will support demand for steel.
By contrast, forecasts show that steel demand in advanced economies grew 1.8 percent last year, following a strong 3.1 percent growth in 2017. Affected by the worsening trade environment, it is expected that steel demand growth will slow down to 0.3% and 0.7% respectively this year and next.
Specifically, from 2017 to 2018, under the influence of the fiscal stimulus measures introduced by the US government, the US economy grew strongly, business confidence was high, employment was strong, and US steel demand also benefited. With the gradual weakening of fiscal stimulus and the normalization of monetary policy, the US economic growth is expected to slow this year. Growth in both construction and manufacturing is expected to slow. Investment in oil and gas exploration is also expected to slow and infrastructure spending is not expected to increase.
The EU economy is facing the risk of a deteriorating trading environment and uncertainty about the Brexit. It is predicted that the growth of steel demand in the major economies of the EU this year (especially those with higher export dependence) will slow down. Steel demand growth is expected to improve next year, depending on easing trade tensions.
Last year, Japan’s steel demand grew, mainly due to a favorable investment environment, continued construction activity and increased consumer spending before the consumption tax hike. In the next two years, despite the support of public projects, steel demand is likely to fall slightly as both construction and export growth slows.
In addition, in terms of industries, the forecast said that with the suppression of automobile demand and the weakening of government stimulus measures, the growth of the automobile industry in many countries slowed down sharply last year, especially in the EU, Turkey, and China. Affected by this, global vehicle production growth rate fell from 4.9% in 2017 to 2.2% last year. This year, global auto production growth will continue to slow down to 1%, and it is expected to stabilize next year. However, in Latin America, especially Brazil, car production will continue to rebound steadily against the trend.
Construction growth in advanced economies is also expected to slow slightly, but a rebound in construction growth in developing economies is expected to keep global growth at 3 percent this year and next. However, in China, Turkey, South Korea, and Argentina, the construction industry is expected to continue to contract this year. With weak investment and deteriorating trading environment, the global machinery industry is expected to continue to slow down and will continue until next year. In major producers such as Germany, Japan, and China, the growth slowdown will be more prominent.
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