Steel demand growth in India is seen to be the highest at 7.3% in the current year, while there will be slackening of demand in all other major steel-producing nations such as China, the US, Japan, Korea and Russia. The world demand for the alloy would decelerate 1.7% compared to 2014, according to World Steel Association (WSA).
India’s steel demand grew by 3.1% in 2014 to 75.9 MT. In the current year, the demand is expected to grow to 81.5 MT. The demand is likely to accelerate further next year with 7.6% growth, the premier industry organisation said in its short-range outlook for the sector.
“We expect the current headwinds to moderate in 2016, but this is based on a belief that the Chinese economy will stabilise. 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,” said Jurgen Kerkhoff, Chairman, Worldsteel Economics Committee.
The global steel industry has, for the time being, reached the end of a major growth cycle which was based on the rapid development of China. Combined with China’s slowdown and low investment, financial market turbulence and geopolitical conflicts in many developing regions, the 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, he added. The decelerated Chinese economy is unlikely to spring any surprise any more with its steel demand forecast to decrease by 3.5% in 2015 and 2% in 2016, thanks to the rebalancing measures on the investment and subdued real estate sector.
The performance of some key emerging and developing economies also started to deteriorate in 2012 due to structural issues, lower commodity prices associated with China’s economic slowdown, and in some cases, escalating political instability. WSA said after growing by just 0.7% in 2014 to 1540 MT, the average global steel demand is likely to fall by (-) 1.7% in the current year to 1,513 MT. But, it will grow by 0.7% in the next year to 1,523 MT.