Steel Markets
Worldsteel lowers short-term forecast for global steel demand
Written by Laura Miller
October 14, 2024
The World Steel Association (worldsteel) has made significant downward revisions to its Short Range Outlook for global steel demand.
The Brussels, Belgium-based association said on Monday it now expects global steel demand to reach 1,751 million metric tons (mt) (1,930 million short tons) this year, down 0.9% from 2023.
Earlier this year, worldsteel had projected a 1.7% year-on-year (y/y) increase for 2024.
Its earlier expectation of “a continued recovery in global manufacturing activity in 2024 has not materialized,” it said, with the sector instead experiencing a slump in the third quarter.
“2024 has been a difficult year for global steel demand as the global manufacturing sector continued to grapple with persistent headwinds such as declining household purchasing power, aggressive monetary tightening, and escalating geopolitical uncertainties,” Dr. Martin Theuringer, managing director of the German Steel Association and chair of worldsteel’s economics committee, said in a statement.
“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 added.
Worldsteel anticipates that steel demand will be down notably this year in China and most major developed countries. Steel demand in India, in contrast, is forecast to grow markedly both this year and in 2025. For most other major developing economies, worldsteel foresees a demand rebound after slowdowns in 2022 and 2023.
Looking ahead to 2025
Despite the ongoing challenges, worldsteel remains cautiously optimistic about a recovery in 2025.
It expects a 1.2% rebound in 2025 steel demand, down notably from the 2.7% rise it predicted earlier this year. Following three years of falling demand, a broad-based recovery is forecast for the world ex-China.
Easing financing conditions, increased public and private investments, and the green transition will drive demand for steel, worldsteel said, particularly for renewable energy projects and infrastructure development.
Additionally, it projects the expansion of electricity grids and renewable energy capacity to double steel demand for these sectors by the end of the decade, especially in China, India, and developed economies.
A more substantial recovery in residential construction in the US, EU, and South Korea is also expected in 2025, driven by an anticipated easing in fiscal policy.
The automotive sector, which saw growth in 2023, is expected to slow down in 2024 before recovering in 2025.
Developed world
Worldsteel predicts a 2.0% drop in steel demand this year in the developed world, as major economies, including the US, Japan, Korea, and Germany, face considerable declines.
However, a recovery is anticipated in 2025 “driven by the long-awaited upturn in steel demand in the EU, and modest recoveries in the US and Japan,” worldsteel noted. It projects steel demand growth of 1.9% in the developed world in 2025.
In the US, steel demand was 90.5 million mt in 2023, according to worldsteel’s figures. It foresees a 1.5% decline in US demand this year, followed by a 2.0% increase to 91.0 million mt in 2025.
China
Steel demand in China will continue to be impacted by its struggling real estate sector. According to worldsteel’s predictions, demand will drop 3.0% this year to 868.8 million mt and another 1.0% in 2025 to 860.1 million mt.
Developing world ex-China
Strong growth in India and recoveries in other major emerging markets will drive steel demand in the developing world, excluding China, worldsteel said.
Growth of 3.5% is expected this year in the developing world ex-China, and another 4.2% rise is likely in 2025.
Steel demand in India is forecast to rise 8.0% y/y to 143.4 million mt this year, with a further 8.5% increase next year.
In Mexico, worldsteel predicts a 0.9% y/y rise in steel demand to 29.3 million mt in 2024, followed by a 0.6% increase to 29.5 million mt in 2025.
Laura Miller
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