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- Demand for steel in the emerging economies grew by 2.1% in 2018
- Demand for steel is expected to remain positive into 2019, growing at 1.4% globally
- Demand for steel in the Middle East region recorded an increase of 2.1% in 2018
Tokyo, Japan - The World Steel Association (worldsteel), headed by HE. Saeed Ghumran Al Remeithi, Emirates Steel CEO and the Chairman of the worldsteel Economic Committee, released its Short Range Outlook (SRO), during its bi-annual meeting Tokyo, Japan.
According to the report, worldsteel projects global steel demand will reach 1,657.9 Mt in 2018, an increase of 2.1% over 2017. In 2019, it is forecasted that global steel demand will grow by 1.4% to reach 1,681.2 Mt.
Commenting on the outlook, Al Remeithi said: “In 2018, global steel demand continued to show resilience supported by the recovery in investment activities in developed economies and the improved performance of emerging economies. Demand for steel is expected to remain positive into 2019.”
“While the strength of steel demand recovery seen in 2017 was carried over to 2018, risks have increased. Rising trade tensions and volatile currency movements are increasing uncertainty. Normalization of monetary policies in the US and EU could also influence the currencies of emerging economies,” he added.
"In the Middle East region, steel demand increased by 2.1%, reaching 54.5 million tons this year. In 2019, steel demand is anticipated to grow by 1.2% to reach 55.1 million tons. Structural reforms and rising oil prices have helped boost the slow upward growth of steel in the GCC region," Mr. Al Remeithi concluded.
Global steel demand trends and highlights for 2018 and 2019:
China:
In the first half of 2018, Chinese steel demand got a boost from the mini stimulus in real estate and the strong global economy. However, continued economic rebalancing efforts and toughening environmental regulations will lead to deceleration of steel demand toward the end of 2018 and 2019.
Both downside and upside risks exist for China. Downside risks come from the ongoing trade friction with the US and a decelerating global economy. However, if the Chinese government decides to use stimulus measures to contain the potential slowdown of the Chinese economy in the face of a deteriorating economic environment, steel demand in 2019 will be boosted.
United Stated of America:
Steel demand in developed economies is expected to increase by 1.0% in 2018 and 1.2% in 2019.
US steel demand grew strongly in 2017, benefiting from strong consumer spending and business investment supported by tax and regulatory changes and fiscal stimulus, although growth in the construction sector moderated. Steel demand growth in 2019 is expected to slow as auto manufacturing and construction activity is expected to see modest growth. The manufacturing sector is expected to perform well thanks to the strength of the machinery and equipment sector.
European Union:
The broadening recovery of EU steel demand is expected to continue, though at a reduced pace, mainly driven by domestic demand. With business confidence high, investment and construction continued to recover while the automotive market may see slower demand growth. Though the economic fundamentals of the EU economy remain relatively healthy, steel demand in 2019 will show some deceleration over the growth seen in 2017-18, partly due to uncertainties resulting from global trade tensions.
Japan and Korea:
Steel demand in Japan is expected to remain stable due to supportive factors on investment (record-high corporate earnings, the continuation of monetary easing, demand associated with the Tokyo Olympics and the increasing need for labor-saving investments).
Steel demand in Korea will contract further in 2018 with all its major steel using sectors struggling. Only a minor recovery is expected in 2019.
India:
As India recovers from the twin shocks of demonetization and the goods and services tax (GST) implementation, India’s steel demand is expected to move back to a higher growth track. Steel demand will be supported by improving investment and infrastructure programs.
ASEAN region:
Sluggish construction activities and stock adjustments led to slow growth of steel demand in the ASEAN region in 2017 and 2018, but demand in the ASEAN region is expected to resume its growth momentum backed by infrastructure programmes in 2019 and onwards. Steel demand in developing Asia excluding China is expected to increase by 5.9% and 6.8% in 2018 and 2019 respectively.
Turkey and Russia:
Even with the rise in oil prices, growth in steel demand in Russia is expected to show weak momentum.
Turkish steel demand is expected to contract in 2018 with the currency crisis it has faced, but the government’s stabilization measures and a consequent return to the competitiveness of the manufacturing sector is expected to help recovery in 2019.
Latin American:
Steel demand in the Latin American economies is continuing its second year of recovery backed by positive developments in the domestic and the global economy. Steel demand in Brazil continued its stable recovery in 2018. This will continue into 2019 as election fever subsides. Steel demand in Mexico has suffered from uncertainties related to the NAFTA negotiation and the election, but the recent signing of USMCA and the new President calming jittery markets are expected to help the economy to recover slowly in 2019.
Steel demand in the emerging economies excluding China is expected to grow 3.2% and 3.9% in 2018 and 2019 respectively.
The World Steel Association (worldsteel) is a non-profit organization based in Belgium with more than 170 members representing 85% of the world's steel production. HE. Engineer Saeed Ghumran Al Remeithi, Emirates Steel’s Chief Executive Officer chairs the Economic Committee for 2 years running from 2018 until 2020.
About the Economic Committee
The World Steel Association Economic Committee offers reliable information on the trends and prospects of global demand for steel in the short and medium term, and discusses the strategic issues and major challenges impacting the future of the industry. It also monitors the adherence of its members to the principles of antimonopoly and encourages the exchange of information and cooperation between different parties to achieve common benefits.
About HE Saeed Ghumran Al Remeithi
HE Engineer Saeed Ghumran Al Remeithi is Emirates Steel's Chief Executive Officer. He is a UAE national and holds a B.S. in Electrical Engineering from California State University. Currently, he chairs the Economic Committee for 2 years running from 2018 until 2020.
Al Remeithi has over 15 years of experience in the steel industry. Eng. Al Remeithi has been with Emirates Steel since its inception. He commenced his career as Production Engineer in Operations and progressed through the ranks to become the Senior Vice President Operations. In July 2011, he was appointed as Chief Executive Officer to head the company into its next phase of business development and to solidify ES position as an integral part of Abu Dhabi 2030 vision.
Media contact:
Matt Wickens
Account executive
Four Communications
+971 52 893 2016
EmiratesSteel@fourcommunications.com
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