An uncertain trade environment and weaker global economic activity is expected to slow steel demand growth in 2019 and 2020, according to the World Steel Association's short-range outlook, released Tuesday.
Worldsteel expects demand to increase 1.3% to 1.735 billion mt in 2019, and increase by 1% in 2020 to reach 1.752 billion mt. Global steel demand increased by 2.1% in 2018.
“In 2019 and 2020, global steel demand is expected to continue to grow, but growth rates will moderate in tandem with a slowing global economy," said Al Remeithi, chairman of the worldsteel economic committeet. "Uncertainty over the trade environment and volatility in the financial markets have not yet subsided and could pose downside risks to this forecast.”
China’s deceleration, a slowing global economy, uncertain trade policies and the political situation in many regions suggest a possible moderation in business confidence and investment, worldsteel said.
Steel demand in developed economies is expected to grow by only 0.3% in 2019 and 0.7% in 2020, reflecting a "deteriorating trade environment." This demand grew by 1.8% in 2018, following growth of 3.1% in 2017.
In the US, construction and manufacturing growth is expected to moderate, while investment in oil and gas exploration should decrease, worldsteel said. Overall, steel demand in the NAFTA region is expected to increase 1.1% to 144.5 million mt in 2019, and 0.8% in 2020 to 145.6 million mt.
The EU is also facing uncertainty as a result of Brexit, with worldsteel expecting slower steel demand growth in the major EU economies in 2019, particularly for those countries that are more export-dependent. EU steel demand is projected to increase 0.3% in 2019 to 170.2 million mt, and 1.2% in 2020 to 172.2 million mt.
Steel demand from emerging economies is expected to grow by 2.9% and 4.6% in 2019 and 2020, respectively, worldsteel said.
India is expected to experience faster growth in the second half, worldsteel noted, with infrastructure development supporting demand in the ASEAN region. Steel demand in developing Asia, excluding China, is expected to grow by 6.5% and 6.4% in 2019 and 2020, respectively.
-- Justine Coyne
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