Oct. 14, 2015
 
Global Steel Demand to Climb Modestly in 2016

The world’s appetite for steel will increase next year following an uncharacteristic decline in 2015. However, demand will remain below the 2014 peak of 1.54 billion tons, predicts the World Steel Association in its annual Short Range Outlook. The Brussels-based group says global steel demand will increase 0.7 percent to 1.52 billion tons in 2016, following a 1.7 percent dip this year.

“It is clear the steel industry has, for the time being, reached the end of a major growth cycle, which was based on the rapid economic development of China. Combined with China’s slowdown, we also face low investment, financial market turbulence and geopolitical conflicts in many developing regions,” says Hans Jürgen Kerkhoff, chairman of the Worldsteel Economics Committee. “The steel industry is now experiencing low-growth, which will last for the time it takes for other developing regions of sufficient size and strength to produce another major growth cycle.”

China’s steel demand has declined the last three years, from a high of 735 million tons in 2013 to a projected 672 million tons in 2016. WSA does project China’s demand decline to slow to 2.0 percent in 2016.

The story is brighter here at home. After dipping 3.0 percent this year to 103.8 million tons, the U.S. is expected to see its steel demand increase to 105.2 million tons next year. However, as with the world at large, that remains below the 107-million-ton U.S. market for steel in 2014.

Mexican demand, which bucked the global trend in 2015 with growth of 4.8 percent, will again see growth of more than 4.0 percent in 2016. WSA forecasts steel demand to reach 24.5 million tons in Mexico next year.

“We expect the current headwinds to moderate in 2016, but this is based on a belief that the Chinese economy will stabilize. Of particular concern is the vulnerability of the emerging economies to external shocks though we are also expecting some, like India, to show resilience to the global slowdown. On a positive note, the recovery of steel demand in the developed economies, even though the momentum has weakened a little, remains on track,” Kerkhoff says.

Demand will continue its upward trajectory in the European Union. Following a 1.3 percent increase to 149.8 million tons this year, demand will increase another 2.2 percent in 2016, WSA predicts.

The greatest global growth will come from underdeveloped Africa, which will grow 6.2 percent in 2016 following 5.1 percent growth this year. However, African demand will just crack 40 million tons annually.



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Monday, October 23, 2017