Global Steel Demand to Grow by 1.3%

Global steel demand will grow more than previously forecast in 2017 due to a recovery in developed economies and accelerating growth in emerging and developing markets, especially Russia, Brazil and India, an industry body said late Friday.

Demand is on course to expand 1.3% in 2017 to 1.535 billion tons and a further 0.9% in 2018 to 1.549 billion tons, World Steel Association said, Fortune reported.

Worldsteel, representing more than 160 steel producers accounting for 85% of global production, had forecast in October that demand would rise 0.5% this year.

The steel industry, worth about $900 billion a year, is seen as a gauge of the world’s economic health.

“We expect that Russia and Brazil will finally move out of their recessions. After the demonetization shock, the Indian economy is expected to resume growth,” Worldsteel said.

“However, China, which accounts for 45% of global steel demand, is expected to return to a more subdued growth rate after its recent short uplift,” it said in a statement.

Worldsteel expects China’s demand for steel to be flat this year at 681 million tons and fall 2% next year to 667.4 million tons as the effects of last year’s infrastructure-led government stimulus fade.

By contrast, the group expects steel demand in emerging and developing economies excluding China to grow 4% this year to 452.7 million tons, and a further 4.9% next year to 474.9 million tons.

Worldsteel raised its estimate for last year’s demand growth to 1% from 0.2%, primarily because Beijing’s infrastructure-led stimulus resulted in a sharper-than-expected increase in China’s steel use.

Steel prices have climbed on the back of rising demand and capacity cuts in China, coupled with a spate of anti-dumping measures that knocked Chinese steel exports from record levels of 2015. According industry consultants MEPS, prices have risen some 45% since December 2015, when they had hit 12-year lows.

India’s consumption of finished steel products is expected to grow by 6.1% in calendar year 2017 compared with 2016.

According to a forecast by WorldSteel, India’s steel product demand is expected to reach 88.6 million tons in 2017, from 83.5 million tons in 2016. The association is more bullish on India’s steel demand in 2018 and projects a growth of 7.1% to 94.9 million tons.

WorldSteel estimates that steel demand in the US will grow by 3% in 2017 to 94.3 million tons and then by 2.9% in 2018 to 97.1 million tons.