According to Mining News Pro -In its short-range outlook for steel demand, WSA (World Steel Association) has projected that the steel demand in case of developed economies is expected to increase by 1% in 2018 and by 1.2% in 2019.
US: In 2017, U.S’s steel demand grew strongly amid strong customer spending and business investment supported by tax and regulatory changes and fiscal stimulus. However, the growth in country’s construction sector was moderate.
For 2019, WSA has projected that country’s steel demand growth is expected to slow down as auto manufacturing and construction activity is expected to see modest growth. The manufacturing sector is expected to perform well amid strengthening of machinery and equipment sector.
EU: In the case of European Union (EU), broadening recovery of steel demand is expected to continue in the region, though at a reduced pace, mainly driven by domestic demand.
With business confidence high, investment and construction demand continued to recover while the automotive market may see slower demand growth. Though the economic fundamentals of the EU economy remain relatively healthy, steel demand in 2019 will show some deceleration over the growth seen in 2017-18, partly due to uncertainties resulting from global trade tensions.
Japan: WSA has projected that steel demand in Japan is expected to remain stable due to supportive factors on investment (record-high corporate earnings, the continuation of monetary easing, the demand associated with the Tokyo Olympics and the increasing need for labour-saving investments).
Korea: Steel demand in Korea will contract further in 2018 with all its major steel using sectors struggling. Only a minor recovery is expected in Korea’s steel demand in 2019.
Steel demand from the construction sector
In case of developed economies, growth in the construction sector is likely to be moderate after the strong recovery momentum seen in 2017-18 due to a high base and rising interest rates.
On the other hand, construction activities in most developing economies will continue to grow, notably in India, ASEAN (Association of South East Asian Region) and MENA (Middle East and North Africa). However, Brazil’s construction sector has not yet started to recover from its deep crisis.
Steel demand from the auto sector
The automotive markets which showed strong growth in the developed economies are softening on the back of slowing demand growth, rising fuel prices and interest rates.
In the developing countries, demand for automobiles will continue to grow at a healthy pace. The machinery sector in both the EU and US continues to be supported by a strong business investment phase.