The World Steel Association believes that it is about to enter a stage of moderate growth in "steel demand"

The World Steel Association released the latest version of its short-term (2024-2025) steel demand forecast report. The report pointed out that global steel demand will further decline by 0.9% in 2024 to 1.751 billion tons. It is expected that after three consecutive years of decline in steel demand, global steel demand will rebound by 1.2% in 2025 and will reach 1.772 billion tons.

The World Steel Association predicts that steel demand in China and most major developed economies will decline significantly in 2024. In sharp contrast, India will maintain strong growth momentum. From 2024 to 2025, India's steel demand is expected to grow significantly. Steel demand will rebound in most other major developing economies in 2024. Although challenging factors still exist, the World Steel Association is cautiously optimistic that global steel demand will enter a stage of broad-based moderate growth in 2025.

Specifically, the World Steel Association predicts that the continued downturn in China's real estate industry will continue to affect its steel demand, which is expected to drop by 3.0% in 2024 and further drop to 1.0% in 2025. The forecast value for 2025 may be revised upward. The World Steel Association believes that the Chinese government is increasingly likely to intervene and support the real economy on a larger scale, which may boost China's steel demand in 2025. In addition, steel demand in developing countries (excluding China) will grow by 3.5% in 2024 and 4.2% in 2025, driven by strong growth in steel demand in India and rebound in demand in other major emerging economies.Since 2021, India has become the strongest driver of steel demand growth. From 2024 to 2025, the World Steel Association expects India's steel demand to grow by 8.0%. This is due to the continued growth in demand from all steel-using industries, especially the continued strong growth in demand from the infrastructure investment industry. Meanwhile, steel demand in other emerging economies around the world, such as the Middle East and North Africa region and the ASEAN region, is expected to rebound in 2024. With steel demand forecasts in major steel-using economies such as the United States, Japan, South Korea and Germany being significantly reduced, the World Steel Association predicts that steel demand in developed countries will fall by 2.0% in 2024 and is expected to grow by 1.9% in 2025.

Global manufacturing activity is expected to remain weak. The World Steel Association said that one of the important reasons for this phenomenon is that households and companies are not willing to invest in durable goods. Affected by inflation that has lasted for three years, the purchasing power of many low- and middle-income families has been eroded, which has further suppressed demand for manufactured goods. However, the World Steel Association's forecast is cautiously optimistic about the potential recovery of global manufacturing in 2025. The World Steel Association said that the resilience of the global economy, easing financing conditions, pent-up demand and rising real incomes in major economies (euro area and Japan) will support the recovery of private consumption and investment, thereby underpinning global manufacturing activity in 2025. recovery.

As for the construction industry, the housing construction sector remains weak in most major markets in 2024, continuing to weigh on steel demand growth, especially in key regions such as China, the United States, the European Union, Japan and South Korea. Housing construction activity cooled sharply in many major economies in 2023 as central banks sharply raised borrowing costs to combat soaring inflation. This cooling continues until 2024, affecting the development of the construction industry and thus reducing local steel demand. As financing conditions ease, the World Steel Association expects a substantial recovery in the residential construction industry (EU, US and South Korea) from 2025 onwards.

As far as the automotive industry is concerned, World Steel Association expects industry growth to slow significantly in 2024 after major car-producing countries achieved significant double-digit growth in 2023. Forecasts for the industry's light vehicle production are being revised downwards across the board amid growing concerns about rising inventories and a slowdown in pure electric vehicle sales in key markets. The shift contrasts with last year's strong performance and highlights the industry's vulnerability to changing market conditions and potential challenges ahead. Against this background, the World Steel Association predicts that global light vehicle production will grow slowly in 2025.

The World Steel Association believes that in 2024, strong investment activities in the manufacturing and public infrastructure industries will support the recovery of global steel demand. Investment in this area by the world's major economies continues to grow, continuing the momentum since 2023. These strategic investments are designed to boost productivity, create jobs, work to address the challenges posed by climate change and secure a leading position for the future. Rising construction costs, labor shortages and rising fiscal debt are likely to pose significant challenges to many major economies, limiting continued growth in these investment areas in the short term. The green transformation of the world economy requires an economic transformation of unprecedented scale and extreme complexity, which is one of the main factors influencing strong investment in the public infrastructure industry.By the end of this decade, steel demand from the expansion of the global power grid is likely to double to approximately 20 million tons per year, a significant increase from the current 10 million tons per year. Therefore, the World Steel Association predicts that expanding global renewable energy generation capacity may increase steel demand by about 40 million tons by the end of this decade, thus affecting the demand for major developing economies such as China and India, as well as developed economies such as Europe and North America. Overall steel demand provides quite obvious support.

Martin Theuringer, Chairman of the World Steel Association’s Market Research Committee, said: “2024 will undoubtedly be a difficult year in terms of global steel demand, as the global manufacturing industry still faces multiple difficulties, such as reduced household purchasing power, In addition, subdued steel demand is further exacerbated by continued weakness in housing construction due to financing difficulties and rising geopolitical uncertainty. Against this backdrop, we have sharply downgraded most sectors, including China. Steel demand forecasts for major economies in 2024 reflect continued weakness in the manufacturing sector and lingering global economic headwinds.”