Worldsteel Sees Demand Growing 3.3% Next Year

Year-on-year steel demand growth “on the order of 3%” in both 2013 and 2014 “is fairly good for a mature industry,” Edwin Basson, director general of the World Steel Association (WSA) told Platts on the sidelines of the group’s annual conference.

Globally, apparent steel use is seen clocking in at 1.475 billion metric tons this year, up 3.1% over 2012. Demand is then seen gaining another 3.3% to 1.523 billion mt in 2014, according to the WSA’s short-term outlook, provided by its committee on economic studies, which consists of chief economists from more than 40 of the steelmaking member companies.

In fact, Worldsteel’s latest short-range forecast was slightly more bullish than its previous outlook issued in April, with all eight regions showing a positive growth forecast in apparent steel use in 2014, ranging from a low of +2.1% (EU27, up to 138 million mt from 135 million mt in 2013) to +8.2% (Africa, just up to 30 million mt, from 2013’s 28 million mt.)

China’s steel demand growth is seen slowing to a rate of 3% growth in apparent steel use in 2014 (721 million mt) from 6% in 2013 (700 million mt).

“Major emerging economies, particularly India and Brazil, have not performed as hoped mainly due to key structural issues,” said Hans Jürgen Kerkhoff, chairman of the Worldsteel economics committee.

“These factors have led to a lower steel demand performance than predicted across the world, with China being the one exception. Steel demand in 2013 is now forecast to grow in China by 6.0%. Thus, despite steel demand growing by only 0.7% in the rest of the world, total global steel demand will grow by 3.1%,” Kerkhoff explained.

Overall, he noted the key risks in the global economy, the eurozone crisis and a hard landing for the Chinese economy, have continued to stabilize through the last six months.