Worldsteel expects 2024 steel demand growth outside China after weaker 2023

• China steel demand to grow in 2023, remain steady in 2024
• Worldsteel cuts 2023 steel demand estimates across Europe, US, Japan
• Slow recovery expected through 2024 from fourth-quarter 2022 low

The World Steel Association unveiled stronger steel demand growth forecasts for 2024 in its April Short Range Outlook published April 18, while simultaneously revising down expectations for 2023 in many regions other than China, where higher steel output has boosted demand for steel raw materials.

Worldsteel expects to see stronger global growth in 2024 led by regions such as India and Europe, while China, the largest global steel producer and consumer of iron ore, is expected to see steel demand steady after growing 2% in 2023, the association said in the report.

With a growing focus on steel demand and sustainability, some participants will increasingly tackle decarbonization to address emissions associated with recovering steel output by adapting steel processes and raw materials.

“Investments in decarbonization and dynamic emerging economies will increasingly drive positive momentum for global steel demand, even as China’s contribution to global growth diminishes,” Ternium CEO Maximo Vedoya, who leads the group’s economics committee, said in a report.

Worldsteel increased China’s steel demand forecast to 939.3 million mt in 2023, from 914 million previously, as the post-coronavirus reopening boosted demand. Meanwhile, Worldsteel cut 2023 steel demand forecasts for Europe, Japan, South Korea, the US and North America, as well as the Middle East, compared to estimates presented by the group in October 2022.

Indian steel demand growth projections may continue to support growing demand for seaborne coking coal, with steel demand estimated to rise by 7.3% in 2023 and 6.2% in 2024, after growth of 8.2% in 2022. India’s demand for finished steel products may hit 130.9 million mt in 2024, leaving the US and Japan increasingly in the shade, according to the Brussels-based group’s latest estimates.

Worldsteel expects the EU and the UK will see a 0.4% contraction in steel demand in 2023, building on declines of 7.9% in 2022, with growth in 2024 of 5.6%. Germany may see demand grow by 10% in 2024, following a 2.2% contraction. Weaker European steel demand may follow a spell of restricted operating rates at regional steel plants, which cut into demand for iron ore and pellets, as well as coking coal. Despite greater reliance on some met coal grades to offset the effect of Russian sanctions, a contraction in iron and steel production in the EU since the second half of 2022 cut requirements.

Steel demand contracted more than expected in 2022, as economic, monetary and geopolitical factors combined with steel stock adjustments to a fourth-quarter low, Vedoya said.

“In 2024, demand growth is driven by regions outside China but faces global deceleration due to China’s anticipated 0% growth, overshadowing the improved environment,” he said. “Sustained inflation remains a downside risk, potentially keeping interest rates high.”

Worldsteel expects global steel demand growth in the future to rely on smaller-scale drivers, primarily concentrated in Asia, after China’s economy matures toward greater consumer and services to limit contributions to global steel demand.

Author Hector Forster