Demand for steel worldwide will rebound by 1.7% in 2024 and will grow a further 1.2% next year, worldsteel predicts in a new short-range outlook examined by Kallanish.
Noting that those consumption growth rates are still relatively weak, worldsteel observes that the global economy seems headed for a soft landing and steel will be in heavy demand from public infrastructure and decarbonisation programs.
“After two years of negative growth and severe market volatility since the Covid crisis in 2020, we see early signs of global steel demand settling in a growth trajectory in 2024 and 2025,” comments Martin Theuringer, chairman of the worldsteel economics committee.
Steel demand in 2024 is projected to be 1.79 million tonnes, according to worldsteel’s outlook. For 2025, the volume should reach 1.81mt.
The apparent end of the monetary tightening cycle will provide relief from the downturn in housing activity and global manufacturing, Theuringer emphasises.
“We expect to see continued strength in investments in public infrastructure and manufacturing facilities,” the outlook document mentions. “However, we also observe that high construction costs and labour shortages emerge as major constraints for many major economies, and this might constrain further growth in public infrastructure and manufacturing facility investments in the short-term.”
Worldsteel predicts that steel consumption in China will remain flat this year compared with 2023. India is experiencing strong steel demand growth. A rebound is occurring in the MENA and ASEAN regions.
“The developed world is also expected to show a strengthening recovery with 1.3% in 2024 and 2.7% in 2025, as we expect to see steel demand finally showing a meaningful pick up in the EU in 2025 and continued resilience in the US, Japan and Korea,” the outlook specifies.
Further, “risks have moderated since our last update in October 2023 and are balanced,” worldsteel observes.
“On the upside, we believe that a faster than expected disinflation accompanied by further monetary policy easing could provide a significant boost to steel using sectors, particularly housing construction,” the authors comment. “We also believe that an acceleration in global decarbonisation efforts or in efforts to strengthen public infrastructure against rising climate change risks are significant positive risks that can support global steel demand going forward.”
Escalating geopolitical tensions, persistent inflation, and rising public borrowing in major economies, however, “are significant risks that certainly have the potential to slow down the ongoing economic recovery or even derail it.”
