Photo by: Duane Daws
The global steel industry is settling in for a period of low growth after China’s slowdown brought an end to a major growth cycle, the World Steel Association (worldsteel) said this week.
Following growth of 0.7% in 2014, worldsteel’s latest Short Range Outlook (SRO) for 2015 and 2016 forecast a 1.7% contraction in global steel demand to 1.51-billion tonnes in 2015 as the steel industry faced several headwinds.
“Combined with China’s slowdown, the global steel industry also faces low investment, financial market turbulence and geopolitical conflicts in many developing regions,” explained worldsteel economics committee chairperson Hans Jürgen Kerkhoff.
However, global steel demand would experience a 0.7% uptick to 1.52-billion tonnes in 2016, moving into a low-growth period lasting until other developing regions of “sufficient size and strength” built up enough momentum to produce another major growth cycle, he noted.
The SRO report showed China’s steel demand contracting by 3.5% in 2015 and by a further 2% in 2016, while steel demand in the emerging and developing economies, excluding China, would increase 1.7% and 3.8% in 2015 and 2016 respectively.
Developed economies were expected to experience a setback in 2015, with a 2.1% decline in demand; however, a return to growth was expected next year on the back of positive growth of 1.8%.
The SRO report forecast 5.1% growth in steel demand in Africa to 39-million tonnes in 2015, followed by 6.2% growth in 2016 to 41-million tonnes.
Worldwide, steel demand, excluding China, was expected to contract by 0.2% in 2015 but to expand by 2.9% in 2016.