Global steel demand continues to show resilience

The World Steel Association (worldsteel) today released its October 2018 Short Range Outlook (SRO). worldsteel projects global steel demand will reach 1,657.9 Mt in 2018, an increase of 3.9%* (please see *note below) over 2017. In 2019, it is forecast that global steel demand will grow by 1.4% to reach 1,681.2 Mt.

Commenting on the outlook, Mr Al Remeithi, Chairman of the worldsteel Economics Committee said, “In 2018, global steel demand continued to show resilience supported by the recovery in investment activities in developed economies and the improved performance of emerging economies. Demand for steel is expected to remain positive into 2019, growing at 1.4% globally.”

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Global steel demand faces uncertainty from tensions in the global economic environment

While the strength of steel demand recovery seen in 2017 was carried over to 2018, risks have increased. Rising trade tensions and volatile currency movements are increasing uncertainty. Normalisation of monetary policies in the US and EU could also influence the currencies of emerging economies.

China steel demand growth is expected to decelerate in the absence of stimulus measures

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.

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.