The World Steel Association released the latest version of its short-term (2024-2025) steel demand forecast report. The report shows that global steel demand will rebound by 1.7% in 2024, reaching 1.793 billion tons. In 2025, global steel demand will increase by 1.2% to 1.815 billion tons.

Dr. Martin Theuringer, Chairman of the Market Research Committee of the World Steel Association, commented on the results of this forecast: “Since the COVID-19 crisis in 2020, the steel market has experienced two years of negative growth and significant fluctuations. We expect that from 2024 to 2025, Global steel demand will continue to grow.

The global economy remains resilient despite facing multiple headwinds, including the aftermath of the COVID-19 pandemic and the Russia-Ukraine war, high inflation, high costs and reduced household purchasing power, heightened geopolitical uncertainty, and significant monetary tightening. As the monetary tightening cycle draws to a close, we note that the deepening credit crunch and rising costs have led to a sharp slowdown in residential construction industry activity in most major markets and hampered global manufacturing. Although the world economy seems to be on track for a soft landing after this round of monetary tightening, we expect global steel demand growth to remain weak and market volatility to remain weak due to the lagging impact of monetary tightening, high costs and high geopolitical uncertainty. Very high. “

We expect that China’s steel demand will remain roughly at the level of 2023 in 2024. Although the continued decline in real estate investment will lead to a corresponding shrinkage in steel demand, the demand growth brought by infrastructure investment and manufacturing will offset the decline caused by real estate. China’s steel demand will return to a downward trend in 2025, with demand expected to drop by 1%.

Forecasts indicate that China’s steel demand will be significantly lower by 2025 than the recent demand peak in 2020. This forecast is also consistent with our judgment that China’s steel demand peak has passed, and as China gradually moves away from an economic development model that relies on real estate and infrastructure investment, China’s steel demand may continue to decline in the medium term.

Our estimate of China’s apparent steel consumption in 2023 is based on China’s official statistics, which show that China’s apparent steel consumption fell by 3.3%. This is a downward revision of approximately 5 percentage points from our October 2023 version of the forecast. China’s steel demand in the fourth quarter of last year was indeed weaker than the October 2023 forecast. However, indicators from the main steel-using industries show that the actual demand for steel is better than the expected apparent consumption.

From 2024 to 2025, global (excluding China) steel demand will experience relatively strong and broad growth, with an annual growth rate of 3.5%.

Since 2021, India has become the strongest driver of steel demand growth. Thanks to the continued growth of all steel-using industries, especially the continued strong growth of infrastructure investment, Indian steel demand will continue to grow by 8% from 2024 to 2025. . Indian steel demand is expected to be nearly 70 million tons more in 2025 than in 2020.

Following a sharp slowdown in 2022-2023, steel demand in other emerging economies such as the Middle East and North Africa and ASEAN is expected to accelerate in 2024-2025. In ASEAN, growing difficulties such as political instability and reduced competitiveness may lead to slower steel demand growth in the future.

Steel demand in advanced economies is expected to grow by 1.3% in 2024 and 2.7% in 2025, as we expect steel demand in the EU to finally recover materially in 2025, while the United States, Japan and South Korea will also continue to Resilience of steel demand.

The EU and the UK remain the regions currently facing the greatest challenges. The region, and particularly its steel industry, faces challenges from geopolitical changes and uncertainty, high inflation, monetary tightening and the removal of some fiscal support, as well as high energy and commodity prices. The continued impact of these downward factors has led to a sharp decline in steel demand in the region in 2023 to the lowest level since 2000, and a significant downward revision to the 2024 forecast. After only a technical rebound in 2024, steel demand in the region will finally see a significant recovery in 2025, with growth expected to be 5.3%. EU steel demand in 2024 is expected to be only 1.5 million tons above the 2020 trough during the COVID-19 pandemic.

In sharp contrast to the EU, steel demand in the United States continues to demonstrate healthy steel demand fundamentals. In 2023, steel demand in the United States will drop significantly due to the slowdown in the real estate market. Thereafter, U.S. steel demand is expected to quickly return to a growth trajectory in 2024, driven by strong investment activity (buoyed by the Inflation Reduction Act) and a gradual recovery in real estate activity.

Development trends of steel industry

High interest rates and high construction costs have led to a downturn in the residential construction industry, dragging down demand in most major steel-consuming regions.

Residential sector activity in the United States, China, Japan and the European Union fell sharply in 2023, and residential sector weakness is expected to continue into 2024 in most major markets due to the prolonged impact of monetary tightening. A substantial recovery in the residential construction industry is expected to begin in 2025.

Weak global manufacturing activity due to high costs, high uncertainty, tighter financing conditions and weak global demand are also hampering the growth of global steel demand in 2023. Leading indicators suggest that global manufacturing activity will begin to recover in 2024. The automobile industry is a notable exception to the overall weakness in the manufacturing industry. Due to the release of pent-up demand and the relaxation of supply chain constraints, the automobile industry will finally usher in a long-lost strong recovery in 2023. After a year of strong double-digit growth in all major car-producing countries, the industry is expected to show weak growth at best in 2024 in most countries.

Strong investment activity in the manufacturing and public infrastructure sectors will support global steel demand in 2023. Against the backdrop of heightened geopolitical tensions, investment in manufacturing has been driven by the ambitions of major economies to develop strategic industries and ensure secure supplies of strategic components and materials. We believe that the green transformation of the world economy requires an economic transformation of unprecedented scale, which is one of the main factors behind the strong investment in the public infrastructure industry. For example, a recent study by the World Steel Association’s Market Research Committee found that new wind power installations will triple global steel demand by 2030, compared to the early 1920s, to around 30 million tonnes. While steel demand from the wind energy industry accounts for a relatively low share of total global demand, it has the potential to provide quite significant support to overall steel demand in regions such as Europe.

It is worth noting that public infrastructure investments aimed at strengthening infrastructure, resisting increasing risks of climate change and rebuilding after disasters are what will support steel demand in 2023 in some major steel-consuming countries, such as Japan, China, South Korea and Turkey. major factor.

Public infrastructure investment and manufacturing investment will continue to remain strong. However, high construction costs and labor shortages have become major constraints in many major economies, which may restrict further growth in public infrastructure investment and manufacturing investment in the short term.

risk

Since the release of the October 2023 forecast results report, risks have been mitigated and are now in a balanced state.

On the plus side, with faster-than-expected inflation curbing and the consequent further easing of monetary policy, this could provide a significant boost to the steel-using industry, especially the residential construction sector. In addition, the acceleration of global decarbonization efforts or the strengthening of public infrastructure to defend against the increasing risks of climate change pose significant positive risks and help support global steel demand moving forward.

On the downside, major risks such as a further escalation of geopolitical tensions, inflationary pressures proving more persistent than expected, and high and rising public debt levels triggering fiscal consolidation in major economies must have the potential to slow the ongoing The economic recovery in progress has even been interrupted.

Cherry
Website: www.jinyoumetal.com
Email: Cherry@jinyoumetal.com
WhatsApp/WeChat: +86 13373795593

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