Global finished steel demand will increase 7% on-year in 2017 to 1.62 billion tonnes, the World Steel Association forecasts in its latest October short-range outlook. The high growth rate, however, is partly an effect of the shift to official statistics of unrecorded demand previously satisfied by Chinese induction furnaces, which closed down in 2017.

Due to the statistical shift, Chinese demand is forecast by worldsteel to grow 12.4% in 2017 to 765.7 million tonnes. However, disregarding this effect, the underlying growth rate of Chinese steel demand will be 3%, putting the global growth rate in 2017 at 2.8%.

“Confidence and investment sentiments are improving in a large part of the world despite some financial market volatility and growing concern of stock market overvaluation,” worldsteel economics committee chairman TV Narendran said at worldsteel's 50th anniversary meeting in Brussels on Monday. “Global trade is gaining momentum despite worries about rising protectionism and talks of rearranging existing free trade agreements.”

The world excluding China is expected to see 2.6% demand growth in 2017 to 856.4mt. Developed economies will grow 2.3% to 408.1mt, while emerging and developing economies excluding China will grow 2.8% to 448.2mt. This compares to worldsteel’s April outlook that forecast 0.7% and 4% growth respectively.

The EU28 is expected to see demand growth of 2.5% in 2017 to 162.1mt, while NAFTA will grow 4.9% to 138.7mt. This compares to 0.5% and 2.2% growth forecasted respectively in worldsteel’s April outlook. ASEAN and Middle East and North Africa demand will grow 4.8% and 0% respectively in 2017 to 77.7mt and 72.6mt.

US, Indian and Japanese demand are also seen growing in 2017, by 4.8%, 4.3% and 2.9% respectively to 96.2mt, 87.1mt and 64mt. However, South Korean demand will decline -1.5% to 56.2mt.

Moving onto 2018, worldsteel sees global demand growth at 1.6% on-year to 1.65 billion t. Chinese demand will be flat at 765.7mt. The world excluding China will see 3% growth to 882.4mt. Notably, ASEAN demand is seen growing 6.8% to 83mt.

“The outlook for China’s steel demand in 2018 remains subdued, showing no growth over 2017 as the government resumes and strengthens its efforts on economic rebalancing and environmental protection,” Narendran said at the meeting attended by Kallanish.

Finished Steel Demand Forecast
  2016 2017 (f) 2018 (f) 2016 2017 (f) 2018 (f)
EU28 158.2mt 162.1mt 164.3mt +2.8% +2.5% +1.4%
Other Europe 40.5mt 40.1mt 42.2mt +1.2% -1% +5.2%
CIS 49.4mt 51.5mt 53mt -2.7% +3.6% +3.8%
NAFTA 132.2mt 138.7mt 140.4mt -1.5% +4.9% +1.2%
Central & South America 39.4mt 40.4mt 42.3mt -13.5% +2.5% +4.7%
Africa 37.6mt 37mt 38.2mt -2.7% -1.6% +3.3%
Middle East 53,1mt 53.9mt 56.5mt -1.4% +1.5% +4.8%
Asia & Oceania 1,005.4mt 1,098.8mt 1,111.1mt +2.2% +9.3% +1.1%
World 1,515.9mt 1,622.1mt 1,648.1mt +1% +7% +1.6%
World excluding China 834.8mt 856.4mt 882.4mt +0.8% +2.6% +3%
Developed Economies 398.8mt 408.1mt 412mt 0% +2.3% +0.9%
China 681mt 765.7mt 765.7mt +1.3% +12.4% 0%
Em. and Dev. Economies excl. China 436mt 448.2mt 470.4mt +1.5% +2.8% +4.9%
ASEAN (5) 74.1mt 77.7mt 83mt +13.9% +4.8% +6.8%
MENA 72.6mt 72.6mt 75.8mt -0.5% 0% +4.5%

Source: worldsteel

NB: Removing statistical distortion of Chinese induction furnace closures, Chinese steel demand will increase 3% in 2017, meaning global growth will be 2.8%.