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Worldsteel predicts modest steel demand growth

Photo courtesy of SSAB The Brussels-based World Steel Association (Worldsteel), in its newly released Short Range Outlook (SRO) update for 2023 and 2024, has forecast that steel demand will grow by 1.8 percent this year and by 1.9 percent in 2024. The forecast means demand for steel would reach about 1,814 billion metric tons this year and 1.849 billion metric tons next year. Worldsteel says its figures indicated steel demand fell by 3.3 percent in 2022. “Steel demand has been feeling the impact of the high inflation and interest rate environment,” remarks Máximo Vedoya, chair of the Worldsteel Economics Committee and CEO of Luxembourg-based steel producer Ternium S.A. Continues Vedoya, “Since the second half of 2022, the activities of steel using sectors have been cooling sharply for most sectors and regions as both investment and consumption weakened. The situation continued into 2023, particularly affecting the European Union and the United States.” Looking forward, Vedoya remarks, “Considering the delayed effect of the tightening monetary policy, we expect steel demand recovery in 2024 to be slow in the advanced economies. Emerging economies are expected to grow faster than developed economies, but the performance of emerging economies continues to diverge, with emerging Asia maintaining resilience.” Vedoya points to the property market in China, regional conflicts and “weakening of construction activities due to high interest rates” as factors that could bring steel demand down. Meanwhile, “Infrastructure investment is showing positive momentum in many regions, even in the advanced economies, reflecting the effect of decarbonization efforts,” says Vedoya. In the U.S., Worldsteel says residential construction is expected to contract in 2023 and 2024, “however, the commercial building sector is showing robust recovery thanks to reshoring activities.” The association also cites growth in the infrastructure sector as a factor that could help steel demand rebound next year. “After a fall of 2.6 percent in 2022, steel demand is expected to decline by 1.1 percent in 2023 and then grow by 1.6 percent in 2024,” states the association. In the EU and the United Kingdom, Worldsteel points to several energy- and economy-related issues as having caused steel demand to fall by 7.8 percent in 2022, and to fall by another 5.1 percent this year. However, “Growth of 5.8 percent is expected in 2024,” states the association. In terms of ferrous scrap export markets, Turkish steel demand is expected to record a growth rate of 19. Percent this year and to continue to grow in 2024, predicts Worldsteel. “Steel demand will benefit from the earthquake-related construction activities and the abandonment of its unconventional monetary policy that drove foreign investment out of the country,” the association writes of Turkey. Sponsored Content DC Contractor cleans up with Sennebogen to cut demolition costs Celtic Demolition Inc. President and founder Ross Tumulty didn’t know he needed a Sennebogen material handler in his demolition fleet. Now that he has one, the Sennebogen has become a necessary asset for his company to complete demolition jobs more efficiently and profitably The association sees an Indian economy it says remains stable, adding that “India’s steel demand is expected to continue its high-growth momentum .” After steel demand growth of more than 9 percent in 2022, steel demand is expected to show similar 8.6 percent growth in 2023 and could rise another 7.7 percent in 2024, predicts Worldsteel. In the Association of Southeast Nations (ASEAN) region, the association says steel demand will be driven by domestic demand and infrastructure investment “despite inflation and deteriorating external conditions.” Among those external conditions, “Vietnam is particularly affected by the deteriorating global trade environment,” writes Worldsteel. Among some of its neighbors in the region, “The political situation is causing delays in infrastructure investment in some countries,” according to the group. After falling by 0.2 percent in 2022, ASEAN steel demand is expected to increase by 3.8 percent this year and grow by another 5.2 percent in 2024.

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Daisie Hobson

Daisie Hobson is a Director at the Reshoring Institute and an engineer with many years of experience in manufacturing and project management.

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