The World Steel Association projects that global steel demand will increase by 1.6 percent in 2018 to 1,648.1 million tonnes (Mt).
Demand increased by 2.8 percent in 2017,worldsteel noted in its steel market forecast for 2017.
“Progress in the global steel market this year to date has been encouraging,” T.V. Narendran, Chairman of the worldsteel Economics Committee, said. “We have seen the cyclical upturn broadening and firming throughout the year, leading to better than expected performances for both developed and developing economies, although the MENA region and Turkey have been an exception.”
Statistically, the global steel market has been affected by the closure of most of China’s outdated induction furnaces in 2017. Such furnaces generally were not captured in official statistics but with their closure the demand from this sector of the market is now satisfied by mainstream steel makers and therefore captured in the officials statistics for 2017, worldsteel explained.
Consequently, the nominal growth rate for steel demand in China increased to 12.4 percent or 765.7 Mt, researchers noted. Disregarding this statistical base effect worldsteel expects that the underlying growth rate of China’s steel demand for 2017 will be 3 percent, which will make the corresponding global growth rate 2.8 percent, according to worldsteel’s short-range outlook.
“In 2018, we expect global growth to moderate, mainly due to slower growth in China, while in the rest of the world, steel demand will continue to maintain its current momentum,” Narendran said.
“So, world steel demand is recovering well, driven largely by cyclical factors rather than structural. The lack of a strong growth engine to replace China and a long term decline in steel intensity due to technological and environmental factors will continue to weigh on steel demand in the future.”What is your steel market forecast for 2018? Share it with us through comments or complete our Scrap Metal Market Outlook.
Image courtesy of worldsteel