Global steel industry poised for robust growth in 2018

Available data indicate a gradual downward trend in world prices for iron ore, coking coal and scrap metal from current levels. This sounds good for the steel industry, which is seeing a surge in demand. The WSA's short-term forecast predicts a 1.8% growth in global steel consumption in 2018, including in India (5.5%), the USA (2.7%), the EU (2.5%), Turkey (5%) , Russia (2.1%), and South Korea (1%). China is also likely to consume the same volume of steel as in 2017.

Meanwhile, the IMF's recently released global economic forecast predicted reasonably good 3.9% global GDP growth, fueled by 7.4% GDP growth in India, 6.6% in China, 2.4% in the EU, and 2 , 9% in the US. Japan, the largest steel producer, may also experience 1.2% GDP growth this year. Thus, higher global economic growth, which will also require investment growth of 11% over last year to take the investment share as a percentage of global GDP up to 26% according to IMF estimates, will provide significant demand for rolled steel in varying proportions. in different countries depending on the main focus of investment as a percentage of GDP.

However, the vulnerability of these positive outlooks hinges on what needs to happen in China, which not only controls nearly 50% of global steel production, but is also a major steel exporter, dominates iron ore prices and is gradually shutting down domestic iron ore concentrate plants. It also has a big impact on coking coal prices.

The impact on global steel trade caused by US Section 232 steel import actions may be minor as the US has initiated exclusion measures with a number of major trading partners. For China, however, the US protectionist move could extend to non-steel products and could include Chinese machinery exports. As the US seeks to improve the productivity of its manufacturing sector to consider work and create profit opportunities, it could restrict imports of manufactured goods from China. The slowdown in Chinese indirect steel exports would imply that steel demand in China should increase more to offset the loss of steel market for the production of exported technical products in the United States.

Thus, apart from these minor unpredictable events, the global steel market in 2018 is set for stable growth for the steel industry in terms of reasonable profitability.