Worldsteel expects global demand to increase in next 2 yrs Production & Sales,  International,  Steel Products 2024-04-11 14:15:28

The World Steel Association (Woldsteel) predicted a sustained growth in global steel demand over 2024-2025, according to its latest short-term demand forecast report.


The report forecast a 1.7% growth in global steel demand to 1.793 billion tonnes in 2024, and a 1.2% further in 2025 to 1.815 billion tonnes.


Despite facing multiple challenges, such as the ongoing Russia-Ukraine conflict, high inflation, rising costs, decreased household purchasing power, geopolitical uncertainties, and significant monetary tightening, the global economy continues to show resilience.


However, the report pointed out that the credit tightening and rising costs have led to a sharp slowdown in residential construction activity in most major economies, hindering the demand of steel worldwide.


Although the world economy appears to be landing softly after this round of monetary tightening, the continued effects of monetary tightening, high costs, and geopolitical uncertainties are expected to keep global steel demand growth in check.


The report forecast Chinese steel demand will roughly maintain its 2023 level in 2024, despite the continued decline in real estate investment. However, the growth in demand from infrastructure investment and manufacturing will offset the decline caused by real estate. But Chinese steel demand is expected to return to a downward trend in 2025.


According to Worldsteel, Chinese steel demand is expected to remain flat at 896 million tonnes in 2024, and is expected to decrease by 1% to 887 million tonnes in 2025.


During 2024-2025, steel demand in countries other than China is expected to show strong growth, with an annual rate of 3.5%. Among them, steel demand in developed economies is expected to increase by 1.3% and 2.7% year-on-year in 2024 and 2025, respectively, while that in emerging and developing economies (excluding China) is expected to increase by 5.0% and 4.0%, respectively.


Since 2021, India has become the strongest driver of steel demand growth. Benefiting from the continued growth of the entire steel industry, especially the sustained strong growth of infrastructure investment, India's steel demand will continue to grow by 8% in 2024-2025. India's steel demand in 2025 is expected to be nearly 70 million tonnes higher than in 2020.


Following a significant slowdown in 2022-2023, steel demand in other emerging economies such as the Middle East, North Africa, and ASEAN is expected to accelerate in 2024-2025. However, the report pointed out that in ASEAN, increasing political instability and declining competitiveness may lead to a slowdown in future steel demand growth.


The Worldsteel expected substantial recovery in EU steel demand in 2025, while the United States, Japan, and South Korea will continue to show resilience in steel demand.


Currently, the EU and the UK remain the regions facing the greatest challenges, including geopolitical uncertainties, high inflation, monetary tightening, partial withdrawal of fiscal support, and persistently high energy and commodity prices.


The sustained impact of these downward factors led to a significant decline in steel demand in the region in 2023, reaching its lowest level since 2000, with forecasts for 2024 also significantly downgraded. It is predicted that EU steel demand in 2024 will only be 1.5 million tonnes higher than the low point during the COVID-19 pandemic in 2020.


The report pointed out that as inflation suppression exceeds expectations and further easing of monetary policy follows, this may significantly boost the steel demand, especially in the residential construction.


Additionally, the accelerated global decarbonization efforts or increased defense against the growing risks of climate change, along with the strengthening of public infrastructure, constitute significant positive risks that will support the continued development of global steel demand.


However, risks of the increasing geopolitical tensions, persistent inflation pressure, and high public debt levels triggering fiscal consolidation in major economies could potentially hinder the current economic recovery or even lead to a halt in the recovery process.


(Writing by Alex Guo  Editing by Harry Huo)
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