Company News


about rising protectionism and talks of rearranging existing free trade agreements.


Developed economies gain strong foothold for recovery


The US economy continues to exhibit robust fundamentals supported by strong consumer spending and rising business confidence. Concern about tensions within the EU particularly over migration policies is receding and the EU economic recovery is broadening. Japanese steel demand is showing better than expected performance benefitting from the government stimulus package, improving exports and preparations for the 2020 Olympic games. South Korea’s steel demand is suffering from high consumer debts, weakening construction and a depressed shipbuilding sector, while escalated tension around the North Korean nuclear weapons threat poses a serious and highly unpredictable risk.


With these generally favourable developments steel demand in the developed economies is expected to increase by 2.3% in 2017 and 0.9% in 2018.


China The Chinese economy, which has been gradually


decelerating, is


increasingly supported by consumption while investment continues to decelerate. However, government stimuli, particularly a moderate boost to the construction programme, contributed to increased GDP growth in 2017.


China’s steel demand is expected to increase by 3.0% in 2017, an upward revision over the previous forecast. The recent closure of induction furnaces will lead to a one-off jump in measured steel use in 2017 to 12.4% (please see A special note on China).


www.ireng.org


The outlook for China’s steel demand in 2018 remains subdued, showing no growth over 2017 as the government resumes and strengthens its efforts on economic rebalancing and environmental protection.


Developing countries are benefitting from the global recovery and economic reforms, but to varying degrees


Developing countries benefit from a strengthening global economy. The reform agendas in many developing countries such as Egypt, Brazil, Argentina, Mexico and India are expected to enhance their growth potential over time.


India had a slowdown in economic activity in 2017, but accelerating government reforms are expected to bring about a better investment environment leading to growth in the coming years. Investment activities are still driven by government initiatives and private sector investment is still restrained due to leveraged corporate balance sheets.


ASEAN remains a high growth region, especially Vietnam and the Philippines, while more mature economies such as Thailand and Malaysia are showing slower growth.


In the CIS steel demand is expected to strengthen in 2017-2018 and specifically Russia is likely to maintain its slow recovery.


Turkish steel demand is expected to resume growth momentum in 2018.


The MENA region’s outlook has suffered from low oil prices, geopolitical strife and high inflation. The region would benefit from reconstruction efforts once the major conflicts are ended. GCC countries continue to struggle with the low oil price environment.


Countries in South America have been slow so far to benefit from the recovery in the global economy. In Brazil continuing depressed construction activity has held demand recovery back in 2017 but a stronger recovery is expected in 2018.


Steel demand in the developing economies


excluding China is expected to grow by 2.8% in 2017 and 4.9 % in 2018.


The construction and machinery sectors are likely to benefit from improving investment sentiments while the automotive sector might moderate


The construction sector in the developed


economies, which had been slow to recover from its collapse after the 2008 economic crisis, is now showing more positive signs both in the residential and commercial sectors due to rising incomes and improving investment sentiments. Infrastructure investment, which has been driving steel demand in developing countries, is likely to get some additional support from the developed world’s infrastructure renewal initiatives.


The global automotive sector is reporting a strong performance in 2017 with an especially strong performance in Turkey and Mexico. However, in the US and China the auto sector could moderate and this trend is likely to extend to other countries in 2018.


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ENGINEER THE REFRACTORIES


November 2017 Issue


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