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WORLDSTEEL SHORT RANGE OUTLOOK 2017/2018


Moderate but continued growth expected for global steel demand


The World Steel Association (worldsteel) today released its October 2017 Short Range Outlook (SRO). worldsteel forecasts global steel demand will reach 1,622.1 Mt in 2017. In 2018, it is forecast that global steel demand will reach 1,648.1 Mt. worldsteel forecasts that global steel demand excluding China will reach 856.4 Mt, an increase of 2.6% in 2017 and 882.4 Mt, an increase of 3.0% in 2018.


*Please see A special note on China.


Commenting on the outlook, Mr T.V. Narendran, Chairman of the worldsteel Economics Committee said, “progress in the global steel market this year to date has been encouraging. We have seen the cyclical upturn broadening and firming throughout the year, leading to better than expected performances for both developed and developing economies, although the MENA region and Turkey have been an exception.


The risks to the global economy that we referred to in our April 2017 outlook, such as rising populism/protectionism, US policy


shifts, EU


election uncertainties and China deceleration, although remaining, have to some extent abated. This leads us to conclude that we now see the best balance of risks since the 2008 economic crisis. However, escalating geopolitical tension in the Korean peninsula, China’s debt problem and rising protectionism in many locations continue to remain risk factors.


In 2018, we expect global growth to moderate, mainly due to slower


growth in China, while in the rest of the world, steel demand will continue to maintain its current momentum.


So, world steel demand is recovering well, driven largely by cyclical factors rather than structural. The lack of a strong growth engine to replace China and a long term decline in steel intensity due to technological and environmental factors will continue to weigh on steel demand in the future.”


*A special note on China:


China closed most of its outdated induction furnaces in 2017, a category which was generally not captured in official statistics. With closure of the induction furnaces, the demand from this sector of the market is now satisfied by mainstream steel makers and therefore captured in the official statistics in 2017. Consequently, the nominal growth rate for steel demand in China increased to 12.4% or 765.7 Mt. Disregarding this statistical base effect worldsteel expects that the underlying growth rate of China’s steel demand for 2017 will be 3%, which will make the corresponding global growth rate 2.8%.


Global economic momentum bodes well for steel demand growth in the short term


Both advanced and developing economies are exhibiting stronger


economic momentum this year. Confidence and investment sentiments are improving in a large part of the world despite some financial market volatility and growing concern of stock market overvaluation.


Also on a positive note, global trade is gaining momentum despite worries


November 2017 Issue


ENGINEER THE REFRACTORIES


9


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