Short Range Outlook for 2017 and 2018 is released by the World Steel Association.
Worldsteel forecasts that global steel demand will increase by 1.3% to 1,535.2 Mt in 2017, following growth of 1.0% in 2016. In 2018, it is forecast that global steel demand will grow by 0.9% and will reach 1,548.5 Mt.
Commenting on the outlook, Mr T.V. Narendran, Chairman of the worldsteel Economics Committee said, “In 2016, steel demand recovery was stronger than expected with the upside mostly coming from China. We believe in 2017 and 2018 we will see a cyclical upturn in steel demand with a continuing recovery in the developed economies and an accelerating growth momentum in the emerging and developing economies. We expect that Russia and Brazil will finally move out of their recessions. However, China, which accounts for 45% of global steel demand, is expected to return to a more subdued growth rate after its recent short uplift. For this reason, overall growth momentum will remain modest.
Global economy is gaining strength, but uncertainty escalates. China slowdown
The economic rebalancing and reform agenda of the Chinese economy continued for the first half of 2016, only to be interrupted by the government’s mini stimulus measures designed to reduce the speed of the decline. This produced a short term boom in infrastructure investment and the housing market, which stimulated demand for steel and other commodities. As a result, China’s steel demand showed growth of 1.3% in 2016. While the Chinese economic outlook appears stable and steel demand continues to remain strong in the early part of 2017, this is expected to gradually decelerate as the government tries to retighten its real estate policies.
China’s steel demand is expected to remain flat in 2017 and then decline by -2% in 2018.
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