India's steel demand to increase post polls: World Steel Association
In 2018, global steel demand increased by 2.1%. In 2019 and 2020 growth is still expected, but in a less favourable economic environment
Steel demand in India is tipped to show an above-7% in both 2019 and 2020 on sustained infra spends with the economy expected to achieve faster growth in the second half of 2019 post general elections having overcome the shocks of demonetisation and the GST implementation, the World Steel Association has said.
“While the fiscal deficit might weigh on public investment to an extent, the wide range of continuing infrastructure projects is likely to support growth in steel demand above 7% in both 2019 and 2020, the Brussels-based industry association said in its latest Short Range Outlook April 2019. Worldsteel members represent around 85% of global steel production.
In 2018, global steel demand increased by 2.1%, growing slightly slower than in 2017. In 2019 and 2020 growth is still expected, but in a less favourable economic environment. China’s deceleration, a slowing global economy, and uncertainty surrounding trade policies and the political situation in many regions suggest a possible moderation in business confidence and investment.
Steel demand in developing Asia excluding China is expected to grow by 6.5% and 6.4% in 2019 and 2020 respectively, making it the fastest growing region in the global steel industry. In the ASEAN region, infrastructure development supports demand for steel, it said.
Al Remeithi, chairman of the worldsteel Economics Committee said, “In 2019 and 2020, global steel demand is expected to continue to grow, but growth rates will moderate in tandem with a slowing global economy. Uncertainty over the trade environment and volatility in the financial markets have not yet subsided and could pose downside risks to this forecast.”
Steel demand in the developed economies grew by 1.8% in 2018 following a resilient 3.1% growth in 2017. We expect demand to further decelerate to 0.3% in 2019 and 0.7% in 2020, reflecting a deteriorating trade environment.
In 2017-18, steel demand in the US benefitted from the strong growth of the economy driven by government-led fiscal stimulus, leading to high confidence and a robust job market. In 2019, the US growth pattern is expected to slow with the waning effect of fiscal stimulus and a monetary policy normalisation.
The EU economies also face the deteriorating trade environment and uncertainty over Brexit. “We expect slower growth in demand for steel in the major EU economies in 2019. Steel demand growth is expected to improve in 2020, dependent on a reduction in trade tensions”, the report added.