According to Mining News Pro -WSA (World Steel Association) has released its short range outlook for the global steel demand and as per its projections the global steel demand for the year 2018 is anticipated to reach 1,657.9 MnT, an increase of 3.9% y-o-y basis whereas for 2019, the same is expected to grow by 1.4% to reach 1,681.2 MnT.
WSA has forecasted that the steel demand in developing Asia excluding China is expected to increase by 5.9% and 6.8% in 2018 and 2019 respectively.
India`s steel demand is expected to move back to a higher growth track as the country recovers from "twin shocks of demonetization and GST implementation", WSA said. Country’s steel demand will be supported by improving investment and infrastructure programs world steel said adding the stressed government finances and corporate debt weighs on the outlook.
Chinese steel demand likely to remain flat 2019 amid absence of stimulus measures
According to WSA, in the first half of 2018, Chinese steel demand got a boost from the mini stimulus in real estate and the strong global economy. However, continued economic rebalancing efforts and toughening environmental regulations will lead to deceleration of steel demand toward the end of 2018 and 2019.
WSA said that both downside and upside risks exist for China. 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.
Steel demand in other developing economies
Steel demand in the emerging economies excluding China is expected to grow 3.2% and 3.9% in 2018 and 2019 respectively as per WSA.
In case of other emerging and developing economies, the recovery has been slow to gain momentum, with rising uncertainty in both domestic and external environments. Structural reforms, high financial market vulnerability and possible currency pressures from the tensions in the global economy are amongst the main reasons.
In the Gulf Cooperation Council (GCC) countries, reforms and a stronger oil market have led to an upward momentum in steel demand, but at a slow pace. The outlook for Iran has turned less favourable due to the reinstatement of sanctions by the US.
Even with the rise in oil prices, growth in steel demand in Russia is expected to show weak momentum. Turkish steel demand is expected to contract in 2018 with the currency crisis it has faced, but the government’s stabilisation measures and a consequent return to the competitiveness of the manufacturing sector is expected to help recovery in 2019.
Steel demand in the Latin American economies is continuing its second year of recovery backed by positive developments in the domestic and the global economy.
Steel demand in Brazil continued its stable recovery in 2018. This will continue into 2019 as election fever subsides.
Steel demand in Mexico has suffered from uncertainties related to the NAFTA negotiation and the election, but the recent signing of USMCA and the new President calming jittery markets are expected to help the economy to recover slowly in 2019.
