Posted on 18 Oct 2023
Worldsteel has kept its forecasts for Chinese steel demand over 2023 and 2024 unchanged, but has cut forecasts for Japan and ASEAN this year. As a result, Asia and Oceania will only recover 2021 demand levels in 2024, not 2023 as previously forecast, Kallanish notes.
The region as a whole is now expected to see apparent steel demand of 1.298 billion tonnes in 2023, up 2.6% year-on-year, and 1.315 billion tonnes in 2024, up 1.3%. That compares to the April forecast of 1.304 billion tonnes in 2023, up 2.9%, and 1.319 billion tonnes in 2024, up 1.7%.
China is expected to see apparent steel consumption recover 2% in 2023 to 939.3 million tonnes, and then to stay flat in 2024, worldsteel still predicts. This will be supported by infrastructure spending and a stabilisation of the real estate sector towards the end of this year. It notes however that there are significant risks to its forecast for 2024, such as less stimulus and continuing real estate issues.
ASEAN has had its growth rates slashed for this year. In April, worldsteel had expected ASEAN apparent steel demand to recover 6.2% in 2023 to 77.1mt, and to grow again by 5.7% to 81.4mt in 2024. In its latest forecast, however, ASEAN demand will only grow 3.8% to 75.3mt in 2023, and 5.2% to 79.2mt in 2024.
Vietnam, in particular, has had a difficult year for steel demand, with re-rollers and galvanisers struggling to export their products, and the local construction sector roiled by a debt crisis and corruption scandals. Southeast Asian economies, in general, are relying on government infrastructure spending to boost demand. High interest rates, currency fluctuation and the turbulent geopolitical environment have triggered headwinds, however.
Japan, the fourth-largest steel consumer globally, is now expected to see apparent steel demand fall another 2% this year to 53.9mt, before inching 0.6% higher to 54.2mt in 2024. Worldsteel had previously forecast that Japanese demand would grow 4% this year to 57.2mt, and another 1.2% to 57.9mt in 2024. Demand has continued to struggle in the face of automotive slowdowns and weak investment.
South Korea, meanwhile, is now expected to see 3.3% growth in apparent steel demand this year to 53mt, and 1.1% growth in 2024 to 53.6mt. This is actually an improvement on the April forecast of 2.9% growth to 52.7mt this year, but 2024 growth is now lower than the originally forecast 2% to 53.8mt.
Source:Kallanish
