PARIS: Global demand for steel will grow by just 2.0 percent this year owing to a rebalancing of the Chinese economy and a slowdown in other emerging countries, the sector’s trade body said on Monday.
The growth forecast to 1,562 million tons in steel use by the World Steel Association is down from the 3.1 percent rate it forecast in April and the 3.8 percent recorded in 2013.
“The positive momentum in global steel demand seen in the second half of 2013 abated in 2014 with weaker than expected performance in the emerging and developing economies,” the head of the association’s economics committee, Hans Juergen Kerhoff, said in a statement.
“The slowdown in China’s steel demand reflecting the structural transformation of the economy has contributed significantly to our lower global growth projection,” he added.
The WSA now expects just 1.0 percent growth in China’s steel use this year to 748.3 million tons, and 0.8 percent growth in 2015.
“In China rebalancing [of the economy]will continue to act as a drag on steel demand,” said Kerhoff.
Falling commodity prices, structural constraints and geopolitical tensions also let to a “major slowdown” in South America and the CIS countries.
The WSA now expects recoveries in the EU, United States and Japan to be stronger, but not enough to compensate for the slowdown in emerging economies.
A drop of 0.4 percent in US steel use last year is being followed by an upwardly revised 6.7 percent jump this year thanks to strong growth in the automotive and energy sectors, said the WSA. Growth is expected to continue at a rate of 1.9 percent last year.
After growing by 2.1 percent last year, demand growth is expected to accelerate to 2.3 percent this year in Japan to 66.8 million tons.