Growth in global production and consumption of steel is expected to slow over 2018/19, following a significant rebound since early 2016, Fitch Solutions Macro Research’s recently published ‘Global Steel Outlook’ report states.
The global market will post a narrowing deficit of 7.4-million tonnes this year, following 2017’s deficit of 10.7-million tonnes. The global surplus is forecast to average 700 000 t from 2018 to 2027, compared with an average deficit of 1.9-million tonnes from 2013 to 2017.
Global production growth will remain positive – at 1.9% for this year – albeit slower than production growth from 2016 to 2017.
China will remain the driving force behind global steel production, but India is posited as the global steel production growth bright spot, with the country’s share of global steel production to rise from 6% this year to 8.6% in 2027; with output growing from 106-million tonnes this year to 173-million tonnes by 2027.
Production in the US and Europe will continue on 2016’s gradual recovery. Rising protection will play a part in this recovery, especially in the US.
Overall, this will drag prices lower over the next five years, states the report.
Global steel consumption will grow by 4.2% this year and by 2.2% in 2019, compared with 5.1% in 2017.
Global consumption is expected to increase from 1.79-billion tonnes this year to 2.01-billion tonnes by 2027.
A slowdown in China's construction-centric demand is expected to offset a modest acceleration in developed economy demand and relieve the tightness that has developed in the global market.
The country’s consumption is forecast to grow by 7.1% this year, with infrastructure continuing to be the driving force.
India is not expected to post strong steel consumption rates over the coming years, averaging a yearly growth of 5.4% from 2018 to 2027.
US consumption, meanwhile, will accelerate in the coming years owing to infrastructure spending picking up, following a decade of stagnation.
Consumption in other major economies, including Japan and South Korea, will remain relatively weak.