In its short-range outlook for 2016 and 2017, the World Steel Association (worldsteel) has forecast that global apparent steel use will decrease by 0.8 percent to 1.48 billion mt in the current year following a contraction of three percent in 2015. For 2017, it has forecast that world steel demand will return to growth of 0.4 percent and will reach 1.49 billion mt.
According to worldsteel's statement, the economic environment facing the steel industry continues to be challenging with China's slowdown impacting globally across a range of indicators contributing to volatility in financial markets, sluggish growth in global trade and low prices of oil and other commodities. The global steel market is suffering from insufficient investment expenditure and continued weakness in the manufacturing sector. Worldsteel expects that steel demand outside China will continue to grow by 1.8 percent in 2016 and this growth will accelerate to three percent in 2017. In addition, steel demand in China is expected to decline by four percent in 2016 and by three percent in 2017.
Regarding emerging countries, worldsteel stated that the Brazilian economy with its political uncertainty contributed to a severe contraction of 16.7 percent in Brazilian steel demand in 2015 and will contribute to a contraction of 8.8 percent in the current year with a recovery of only 3.1 percent in demand in 2017. Meanwhile, India's prospects are brightening due to low oil prices and policies to increase infrastructure and manufacturing output. India's steel demand will increase by 5.4 percent in both 2016 and 2017 reaching 88.3 million mt in 2017. In Turkey, steel demand is expected to increase by 3.3 percent in 2016 and by 3.2 percent in 2017, supported by the government's focus on pro-growth economic policies and low oil prices. In addition, steel demand in the ASEAN region is also expected to maintain a growth rate of around six percent and will reach 74.6 million mt in 2017.
In developed countries, steel demand will expand by 1.7 percent in the current year and by 1.1 percent in 2017. In the EU, steel demand is forecast to grow by 1.4 percent this year and by a further 1.7 percent in 2017. However, in the US, steel demand is dampened by the fall in oil prices and by the strong dollar, but a robust housing sector will support steel demand, which is expected to rise by 3.2 percent in 2016 and 2.7 percent in 2017.