Global steel demand to slow to 1.7% in 2024

• 2023 steel demand to stagnate in Africa, EU27+UK
• 2023 demand growth in Other Europe
• 2024 to see steepest gains in EU, Turkey, India

The World Steel Association forecasts global steel usage in 2023 to rebound by 2.3% to 1.822 billion mt, slipping back to 1.7% growth in 2024 to 1.854 billion mt, with Chinese steel consumption forecast to stagnate and Russia-CIS-Ukraine demand contracting for two more years.

In a short-range outlook updated April 18, the Brussels-based think tank said global steel consumption this year will be supported by a return to growth in Chinese demand, alongside India (+7.3%), Japan (+4%), South Korea (+3%) and Turkey (+9%).

Demand is set to stagnate in two regions this year — Africa and the EU27+UK — and fall in Russia, the CIS and Ukraine, it said.

Looking further ahead, worldsteel said only Russia, the CIS and Ukraine would see steel demand remain in the negative, while China will be the only country where demand is likely to stagnate, with usage there over 2023-24 forecast to stabilize at 939 million mt/year.

Steel demand in Africa may slip 100,000 mt or 0.2% this year to 40.5 million mt as the war in Ukraine pushes up fuel and food import prices. In Egypt and Algeria in particular, high inflation and currency depreciation have led to large-scale projects being postponed. African demand in 2024 is forecast to recover 4% to just over 42 million mt.

EU27+UK demand, which slumped almost 8% last year, will remain in the negative with a 0.4% contraction to 151.3 million mt in 2023, worldsteel said, as the shockwaves of the war in Ukraine continue to reverberate and other supply chain issues and ongoing monetary tightening take their toll. Demand will rebound by 5.6% in 2024, as those factors dissipate, worldsteel said.

Declines to continue through 2024 in countries at war

The territory covering Russia, the rest of the CIS and Ukraine is the only place worldsteel sees steel demand still weakening noticeably, with a 3.5% decline forecast for 2023, which may deepen to a 4.3% contraction in 2024.

Steel consumption across the territory could therefore fall to 51.5 million mt and 49.3 million mt in 2023 and 2024, respectively, down from 53.3 million mt last year.

Russia’s economy avoided a large-scale crisis in 2022 and steel demand fell less steeply than expected as pipeline projects and residential construction supported demand.

Worldsteel expects construction in Russia to slow in 2023-24, with steel demand likely to contract by around 7% in 2024 — from 5% contractions in the previous two years — to 36.9 million mt, as the economy faces the full extent of challenges related to Western sanctions and workforce leakages caused by immigration and conscription. The prolonged hot phase of the war is delaying the recovery in Ukraine too, where steel demand stands at 40% of its pre-war levels.

EU, Turkey, India to see steepest gains in 2024

Worldsteel sees steel demand growing in most regions in 2023, particularly in Other Europe (7.4%), where Turkey accounts for 83% of consumption, the Association of Southeast Asian Nations (2.9%) and the Middle East (2.2%). In 2024, positive dynamics should spread further afield, with the steepest gains varying between 4% and 6.2% in the EU, Turkey, India and Africa, and the smallest, at 1.2%-2.3%, in Japan, South Korea, the US, Mexico, Canada, and Central and South America.

Gulf Cooperation Council countries — Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE — weathered the headwinds of 2022 thanks to high oil prices, strong domestic demand, a rebound in tourism and foreign capital inflows, but slower expansion in the oil sector and fiscal conservatism will decelerate growth to 2.2%-3.2% in 2023-24, down from 3.8% in 2022.

Worldsteel sees the non-oil sector as a growing pillar of the GCC economy and the region’s steel demand, pointing to planned Saudi investments in non-religious tourism.

The Middle East will consume about 52.4 million mt of steel this year and another 54.1 million mt in 2024.

Tourism and associated urban and transport developments are also driving steel demand in ASEAN nations (Indonesia, Malaysia, Philippines, Singapore, Thailand, Brunei, Laos, Myanmar, Cambodia and Vietnam), with growth of 6.2% to 77.1 million mt in 2023 and 5.7% to 81.4 million mt in 2024, worldsteel estimates.

Weak prospects, political uncertainty in Latin America

Worldsteel forecasts 1.6% demand growth in the US, Mexico and Canada this year, and 1.4% expansion in Central and South America. USMCA may need 135 million mt of steel this year and roughly 138 million mt next year.

The strong post-pandemic rebound of the US economy has run its course, with further growth coming under recessionary pressure. Rising interest rates, land and material costs are impeding residential construction, but the non-residential sector continues to recover, aided by the 2021 infrastructure law and the Inflation Reduction Act. Steel demand from the energy sector is set to benefit from expanding energy production, and US auto sales should fully recover in 2023-24 after falling 8% in 2022 due to rising car and gasoline prices.

Latin America, where steel demand contracted in all countries in 2022, is entering another challenging period featuring weak growth prospects and political uncertainty. Worldsteel estimates the region will need 46 million mt of stell in 2023 and 47 million mt in 2024, only 2.5% above the 45.4 million mt that Central and South America consumed in 2022.

In Brazil, high interest rates, household debts and a weakening labor market will suppress demand for construction and durable goods this year. The expansion of the country’s auto production lost steam at the beginning of 2023 and may halve to 2.2% this year, down from 5.4% in 2022.

Author Ekaterina Bouckley, katya.bouckley@spglobal.com