Oleg Totskyi/Adobe Stock
The World Steel Association forecast global steel demand will rise 3.9% in 2019 and by 1.7% in 2020.
According to the World Steel Association’s October Short Range Outlook (SRO), global steel demand in 2019 is forecast to reach 1,775.0 million tons and 1,805.7 million tons in 2020.
As for China, Chinese steel demand is forecast to rise 7.8% in 2019 but by just 1.0% in 2020.
Saeed Al Remeithi, chairman of the World Steel Association’s Economics Committee, overviewed some of the factors at play in the global steel demand picture.
“The current SRO suggests that global steel demand will continue to grow in 2019, more than we expected in these challenging times, mainly due to China,” he said. “In the rest of the world, steel demand slowed in 2019 as uncertainty, trade tensions and geopolitical issues weighed on investment and trade. Manufacturing, particularly the auto industry, has performed poorly contracting in many countries, however in construction, despite some slowing, a positive momentum has been maintained.”
Despite trade headwinds and slowing economic growth overall, China’s steel demand is forecast to have a solid 2019, before dropping in 2020. The country’s manufacturing and automotive sectors have struggled; according to the China Association of Automobile Manufacturers (CAAM), China’s automobile production dropped 12.1% on a year-over-year basis through the first eight months of the year.
“We expect the Chinese economy to worsen in the later part of 2019 and in 2020 with the unresolved trade tensions adding further pressure,” the SRO stated. “It is unlikely that the Chinese government will reintroduce substantial stimulus measures as it continues to hold a balance between containing the slowdown and pushing forward its economic restructuring agenda. Selective mild stimuli focused on infrastructure and strengthening consumer purchasing power through tax cuts is more likely. The auto industry could benefit from such stimulus in 2020. China’s steel demand is expected to see growth of 1.0% in 2020.”
In the developed world, steel demand is forecast to contract slightly in 2019 after a 1.2% increase in 2018.
Meanwhile, in developing countries (ex-China), the growth picture is mixed.
“Growth of steel demand in the emerging economies excluding China is expected to slow down to 0.4% in 2019 due to contractions in Turkey, MENA and Latin America,” the SRO states. “But the growth is expected to rebound to 4.1% in 2020 due to infrastructure investments, especially in Asia.”