India’s steel consumption growth is likely to be the highest both in current year and the next at 6.2% and 7.3%, respectively, while all other major consuming countries such as China, the US, Japan and Korea are expected to witness a sharp decline, World Steel Association (WSA) says in its first short range outlook for 2015.
The short range outlook, prepared by the largest industry body’s Economic Studies Committee consisting of chief economists of over 40 member companies twice in a year, also forecast continued negative growth in consumption in China in 2015 and in 2016 due to its government’s re-balancing efforts, which has a huge bearing on the real estate market.
China posted negative steel growth in 2014 for the first time since 1995. The use of steel in China shrunk by 3.3% to 710.8 MT in 2014.
WSA, whose members contribute 85% of the global steel production, sees “increased optimism” about India and forecasts India’s steel use to go up to 80 MT in 2015 and further to 85.8 MT in 2016 from 75.3 MT in 2014, up 2.2% from the previous year.
“In the developing and emerging world, we see increased optimism about India and growth in steel use in some MENA and ASEAN countries.
While these developments will not be enough to counterbalance the deceleration of China, we expect to see gradually improving growth prospects beyond 2016,” said Committee chairman Jurgen Kerkhoff.
The committee sees slower growth in steel demand internationally which is likely to average at 0.5% in the current year, down from 0.6% in 2014, to stand at 1,544 MT. However, the global average will be higher at 1.4% in 2016 to touch at 1,565 MT, it said.
The developed world, which recorded a 6.2% growth in steel demand in 2014 on the back of strong fundamentals and a firming recovery, is going to see a moderate growth in 2015 due to high base effect by 0.2% in 2015 and by 1.8% in 2016.
Meanwhile, overtaking the US, India became the world’s third largest steel producer during January-March of the current year. WSA data showed India produced 22.78 MT steel during the period compared to 19.99 MT by the US.