The World Steel Association yesterday released its Short Range Outlook (SRO), in which it forecasts global steel demand to grow 3.9% in 2018.
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Global steel demand is projected to hit 1,657.9 million tons (MT).
Meanwhile, the SRO forecasts global steel demand will rise by 1.4% in 2019, hitting 1,681.2 MT.
“In 2018, global steel demand continued to show resilience supported by the recovery in investment activities in developed economies and the improved performance of emerging economies,” said Al Remeithi, chairman of the World Steel Association’s Economics Committee, in a release. “Demand for steel is expected to remain positive into 2019, growing at 1.4% globally.”
Within the U.S., Canada and Mexico, 2018 demand is forecasted to rise by 1.7% in 2018 and 1.0% in 2019. E.U. demand is projected to rise 2.2% and 1.7% in 2018 and 2019, respectively. In Asia and Oceania, demand is projected to rise 5.0% this year and 1.3% next year.
Unsurprisingly, the SRO refers to rising global trade tensions.
“While the strength of steel demand recovery seen in 2017 was carried over to 2018, risks have increased,” the report states. “Rising trade tensions and volatile currency movements are increasing uncertainty. Normalisation of monetary policies in the US and EU could also influence the currencies of emerging economies.”
Of course, that tension has a hand in the projected deceleration of demand growth in China, pending government-led stimulus measures.
“Both downside and upside risks exist for China,” the report states. “Downside risks come from the ongoing trade friction with the US and a decelerating global economy. However, if the Chinese government decides to use stimulus measures to contain the potential slowdown of the Chinese economy in the face of a deteriorating economic environment, steel demand in 2019 will be boosted.”
Elsewhere, the report states the E.U.’s steel demand recovery will continue in 2019, driven by domestic demand.
“With business confidence high, investment and construction continued to recover while the automotive market may see slower demand growth,” the SRO states. “Though the economic fundamentals of the EU economy remain relatively healthy, steel demand in 2019 will show some deceleration over the growth seen in 2017-18, partly due to uncertainties resulting from global trade tensions.”
The outlook for Japan is continued stability, the report states, while South Korean demand is expected to contract in 2018, with only a “minor recovery” projected for 2019.
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The full SRO report is available here.