Steel demand across the globe to decline 0.8%

Demand for steel across the globe is expected to decline 0.8% to 1,488 million tonnes in 2016, according to the World Steel Association. But, the demand is anticipated to bounce back to growth at 0.4% to reach 1,494 million tonnes in 2017. The association expects steel demand in China, the largest consumer, to fall 4% in 2016 tailed by a 3% decline in 2017, reaching 626.1 million tonnes in 2017.

Business Standard quoted the chairman of World steel Economics board T V Narendran, who said that the steel industry has been facing many economic challenges including the slowdown in China, which impacted the global financial markets, along with weak commodity prices. The association noted that the sluggish economy in China has negatively impacted construction and manufacturing sectors, particularly in automotive and metal units.

In addition, weak oil prices, leading to poor investments in oil industry along with a decline in government expenditure has impacted steel demand in nations depending on energy oriented revenues. On the other side, oil importing nations have benefited from the price slump, easing their monetary policies to improve their economic growth.

Meanwhile, few analysts hope that the weak demand in China might affect the buoyant steel prices. The median steel products price through China rushed more than Rmb2,700 a tonne in the previous week,Financial Times reported.

Demand for steel in developing markets still remains below estimation, hurt by external factors like poor prices of the commodity, currency deflation, cash outflows and poor exports. Meanwhile, steel demand in Russia and Brazil is anticipated to shrink sharply in the coming period amid internal and external issues.

The association expects steel demand in the US to grow by 3.2% in 2016 after a decline of 10.6% in the previous year. Japan's contribution to steel demand will increase by 2.3% in 2016 after a 7% decline in the prior year. South Korea will continue to contribute an increase of 0.6% to the global demand for steel. In Germany, demand for the metal is anticipated to increase by 1.2% in 2016. The country's steel demand in 2015 dropped by 1.5%, as reported by THE FINANCIAL EXPRESS.

In Brazil, where demand declined 16.7% in 2015, demand is anticipated to shrink 8.8% in 2016 with a reclamation of 3.1% in 2017. However, in India, steel demand is anticipated to rise by 5.4% in 2016 and 2017, accomplishing 88.3 million tonnes in 2017. In Turkey, demand is estimated to increase 3.3% and 3.2% in 2016 and 2017 respectively. Steel requirements in Malaysia, Vietnam, Philippines, Thailand and Indonesia is anticipated to rise at a rate of about 6% to reach 74.6 million tonnes in 2017. Demand in emerged nations is estimated to increase 1.7% and 1.1% in 2016 and 2017 respectively.