The World Steel Association (worldsteel) forecasts that global steel demand this year will fall for the third year in a row, down 0.9% but will largely rebound in 2025.
An update of worldsteel’s Short Range Outlook for 2024 and 2025 expects ‘a broad-based recovery’ in the world, excluding China, in 2025 with global demand forecast to rebound by 1.2% to 1 772 million tonnes (Mt).
Martin Theuringer, chair of the worldsteel economics committee and md of the German Steel Association says: ‘2024 has been a difficult year for global steel demand as the global manufacturing sector continued to grapple with persistent headwinds such as declining household purchasing power, aggressive monetary tightening, and escalating geopolitical uncertainties.
‘The ongoing weakness in housing construction, which is driven by tight financing conditions and high costs, has further contributed to the sluggish demand for steel.’
Theuringer believes the ‘significant downward revisions’ to the 2024 outlook for most major economies including China reflect these persistent weaknesses and lingering headwinds.
India’s ‘robust growth’
In stark contrast, India is expected to maintain its strong momentum with robust growth in steel demand projected for both this year and next. Projections for India anticipate an 8.0% increase over 2024 and 2025, fuelled by growth across all steel-consuming sectors and especially the continued strong growth in infrastructure investments.
‘We are cautiously optimistic that global steel demand will enter a phase of broad-based moderate growth in 2025, he adds. ‘The key determinants of the global steel demand outlook for 2025-2026 will be the progress made in the stabilisation of China’s real estate sector, effectiveness of interest rate adjustments in spurring private consumption and business investment, and the trajectory of infrastructure spending dedicated to decarbonisation and digital transformation across major global economies.’
Intervention
The crisis in the Chinese real estate sector is expected to dominate domestic steel demand, resulting in a 3.0% decline in 2024 and a further 1.0% in 2025, although worldsteel acknowledges that substantial Chinese government intervention and support for the economy could bolster demand.
Steel demand in the developing world excluding China is projected to grow by 3.5% in 2024 and 4.2% in 2025, driven by India’s robust growth and a rebound in other major emerging economies.Demand in other emerging economies of the world, such as the MENA and ASEAN regions, is expected to rebound this year after a significant recent slowdown.The developed world is projected to experience a 2.0% decrease as major steel-using economies face significant declines. There is optimism for 2025, however, with a projected growth of 1.9% for these economies. This will be driven by a long-awaited upturn in steel demand in the EU and modest recoveries in the US and Japan.
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