The continuous decline in housing construction, due to tight financial conditions and high costs, has been cited as a reason for the decrease in demand.
Author: Achut Vinay
The global demand for steel is projected to decline by 0.9% in 2024 but is expected to recover in 2025, with an anticipated increase of 1.2%, excluding China. This forecast was released by the World Steel Association, whose members represent 85% of global steel production.
In its latest short-term outlook, the association predicts that demand will fall to 1,751 million tons (mt) in 2024 before rising to 1,772 million tons in 2025. Earlier this year, it had forecasted a 1.7% growth in demand for 2023, reaching 1,793 million tons. The association also reported that crude steel production in 2023 reached 1,831.5 million tons, marking a 1.8% increase compared to 2022.
The continued weakness in the housing construction sector—driven by tight financial conditions and high costs—has been cited as the primary reason for the decline in steel demand.
Martin Theuringer, CEO of the German Steel Association and Chairman of the Economic Committee of the World Steel Association, stated:
“2024 was a challenging year for global steel demand, as the global manufacturing sector continued to struggle with persistent challenges such as declining household purchasing power, aggressive monetary policies, and geopolitical uncertainties.”
India remains strong.
Significant revisions have been made to the steel demand outlook for 2024 for most major economies, including China, reflecting the ongoing weakness in the manufacturing sector alongside global economic challenges. The association has forecast a sharp decline in steel demand in China and most large developed economies in 2024. In contrast, India is expected to continue its strong momentum, with robust growth in steel demand in 2024 and 2025. Since 2021, India has emerged as the strongest driver of steel demand growth, and this trend is expected to continue. The association has maintained its strong growth estimates for India, expecting steel demand to increase by 8% in 2024 and 2025, supported by growth in all steel-consuming sectors, especially continued strong investments in infrastructure.
In fact, the association is optimistic about the outlook for most developing economies. It is expected that most other developing economies will see an improvement in steel demand in 2024, moving past the stagnation of 2022-2023. The association stated that steel demand in the developing world (excluding China) is expected to increase by 3.5% in 2024 and by 4.2% in 2025.
The concerning situation in China
The World Steel Association announced that steel demand in China remains weak due to issues in the country’s real estate sector. The Association stated that the ongoing downturn in the real estate sector is expected to dominate steel demand in China, resulting in a 3% decrease in 2024 and another 1% drop in 2025. However, the Association noted that there is an increasing likelihood of government intervention and further support for the real economy, which could boost steel demand in China in 2025. It is important to note that China has recently reported a significant decline in its annual steel production, with a 9% decrease in July and a 10.4% decrease in August.
اHope for 2025
Despite ongoing challenges, including the lasting effects of tighter monetary policies, high costs, limitations in financial capacity, and geopolitical uncertainties, there is cautious optimism that global steel demand will enter a phase of moderate and widespread growth in 2025.
The World Steel Association announced: “Key factors determining the global steel demand outlook for 2025-2026 will be advancements in the stability of the real estate sector in China, the effectiveness of interest rate adjustments in stimulating private consumption and business investment, and the trajectory of infrastructure spending allocated to decarbonization and digital transformation in the major global economies.”
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