Global Steel Demand Will Slow Down China's Economic Growth

The World Steel Association (worldsteel) has released its short-term forecast for April 2019 (SRO). According to worldsteel forecasts, in 2019 the global demand for steel will reach 1,735 million tons, which is 1.3% more than in 2018. According to forecasts, in 2020 demand will grow by 1.0% and reach 1,752 million tons.

Commenting on the outlook, Al Remeiti, Chair of the Global Steel Committee on the World Economy, said: “Global steel demand is expected to continue to rise in 2019 and 2020, but growth will be moderate, coupled with a slowdown in the global economy. Uncertainty about the terms of trade and volatility in financial markets has not yet diminished and may pose risks to this forecast. ”

Steel demand growth remains positive

Global steel demand increased 2.1% in 2018 (after adjusting for the closure of induction furnaces in China - see Note in short-term forecast for October 2018), increasing slightly more slowly than in 2017. Growth is still expected in 2019 and 2020, but in a less favorable economic environment. A slowdown in China, a slowdown in the global economy, and uncertainty surrounding trade and political conditions in many regions indicate a possible decline in confidence in business and investment.

Steel demand in China remains strong thanks to government incentives

Steel demand in China continues to decline as the cumulative effects of economic rebalancing and trade tensions slow investment and lower productivity. The soft government stimulus softened the economic slowdown in 2018. In 2019, the government is likely to raise the level of stimulus, which is expected to boost steel demand.

Steel demand in China is forecast to contract slightly in 2020 as stimulus effects are expected to subside.