There has been strengthening recovery in the global steel sector but geopolitical uncertainty is clouding the outlook, according to the World Steel Association (worldsteel). The organisation revealed this conclusion in its April 2017 Short Range Outlook, presented at a meeting in London attended by Kallanish.

“In 2016, steel demand recovery was stronger than expected with the upside mostly coming from China. We believe in 2017 and 2018 we will see a cyclical upturn in steel demand with a continuing recovery in the developed economies and an accelerating growth momentum in the emerging and developing economies,” says chairman of the worldsteel economics committee, T. V. Narendran.

The global economy is gaining strength, worldsteel says, but geopolitical uncertainty is escalating due to factors such as Brexit, US policy uncertainties and several other issues. This said, the mood amongst its members remains generally optimistic, says worldsteel director general Edwin Basson.

With global demand for finished steel products at 1,505 million tonnes in 2016, worldsteel forecasts a 1.0% increase in 2017 and a 1.3% upturn in 2018 to 1,535.2mt and 1,548.5mt respectively. It sees Chinese demand as being flat this year and actually reducing by -2.0% in 2018. This is due to the gradual weakening of the effect of recent economic stimulus by the Chinese government, Basson adds.

Elsewhere, the outlook is generally positive, albeit modestly so. Regionally the most optimistic forecasts are those for the emerging and developing economies (excluding China) and for Central and South America. These are seen for 2017 and 2018 growing by 4.0% and 4.9% for the emerging economies and by 3.5% and 4.7% for LatAm, although the latter region is growing from a low base, Basson says.

Country-wise, the projections for India lead the field in terms of percentage demand growth. The south Asian nation’s demand for finished steel products is seen growing by 6.1% in 2017 and 7.1% in 2018, by far the biggest such increases amongst the top 10 steel-using countries in 2016.

Source: worldsteel