Posted on 16 Oct 2024
Global steel demand will likely decline by 0.9% on year during 2024 to reach 1.75 billion tonnes, the World Steel Association (WSA) warns in the latest update of its short-range steel outlook released on October 14. The new prediction of a decline compares with the association's earlier forecast announced in April of a 1.7% on-year rise, Mysteel Global notes.
"We are making significant downward revisions to our 2024 steel demand outlook for most major economies, including China, reflecting the persistent weakness in manufacturing alongside lingering global economic headwinds," Martin Theuringer, managing director of the German Steel Association and chair of the WSA's Economics Committee commented.
"2024 has been a difficult year for global steel demand as the global manufacturing sector continued to grapple with declining household purchasing power, aggressive monetary tightening, and escalating geopolitical uncertainties. The ongoing weakness in housing construction, which is driven by tight financing conditions and high costs, has further contributed to the sluggish demand for steel," he observed.
Regarding China, the WSA predicts a 3% on-year fall in steel demand this year and a further 1% drop in 2025 due to the recession in the country's property sector. But the association acknowledged an upside risk to its forecast for next year, as "there is a growing possibility of more substantial government intervention and support for the real economy, which could bolster Chinese steel demand in 2025," it stated.
Meanwhile, steel demand in the developing countries except China is expected to rise by 3.5% and 4.2% on year respectively in 2024 and 2025, mainly in response to India's robust growth and a recovery in other major emerging economies including those in the ASEAN and MENA regions, according to the release.
India has been the strongest driver of steel demand growth since 2021, the WSA observed, anticipating an 8% on-year rise in the country's steel demand over 2024 and 2025. The rise will be fuelled by demand increases among all steel-consuming sectors, especially by the persistent strong growth in infrastructure investments, it noted.
For the developed economies, although their steel demand may slide by 2% on year this year, due to substantial weakening in major steel-consuming countries such as the US, Japan, South Korea and Germany, there will be a rebound on year during 2025 of as much as 1.9%, driven by the pickup in demand in the EU and modest recoveries in the US and Japan, according to the WSA's projections.
As a consequence, WSA estimated that steel demand worldwide will bounce back by 1.2% on year in 2025 to 1.77 billion tonnes.
"The key determinants of the global steel demand outlook for 2025-2026 will be the progress made in the stabilisation of China's real estate sector, effectiveness of interest rate adjustments in spurring private consumption and business investment, and the trajectory of infrastructure spending dedicated to decarbonisation and digital transformation across major global economies," Theuringer pointed out.
Source:Mysteel Global
