Global Steel Demand May Sustain 2% Growth in 2015: World Steel Association

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Researched by Industrial Info Resources India (Delhi, India)--The global steel demand is set to see a nominal 2% rise over the ongoing financial year 2014-15. Apparent consumption of steel will also increase to 1,594 million tons (MT) in 2015 from 1,562 MT recorded this year, said a recent report from the World Steel Association (WSA). Steel consumption has posted a growth of 3.8% in 2012-13 followed by a 2%-growth in the year after.

According to WSA, despite a dip in performance of the emerging and developing economies, global steel demand is still likely to sustain a growth of 2% in the ongoing 2014-15 financial year. One of the reasons for the projection of lower global growth is the slowdown of steel demand in China followed by South American and the Commonwealth of Independent States (CIS)-countries.

Structural constraints and geopolitical tensions are also the reasons for less demand of steel in China, South America and in the CIS nations. On the other hand, the developed economies turned well this year. Demand of steel have increased in the EU, United States and Japan, but not good enough to beat the slowdown in the emerging economies.

In 2015 it is expected that the growth in steel demand in developed economies to remain moderate. It is also anticipated that interest rates will increase in the US in 2015 and is most likely to impact global capital flows creating instability in the existing markets. Structural reforms and geo-political tensions affecting energy prices, has emerged as new risk factor. Recovery in European nations is constrained by household and government de-leveraging.

WSA, the apex trade body for the iron and steel industry, in its outlook for 2015 projected that the overall apparent steel use in the developed economies will register over 4%-growth in 2014, but then slows to 1.7% in 2015. On the other hand, the emerging and developing economies, excluding China, will grow by 1.7% in 2014, followed by a rebound to 4.7%-growth in 2015.

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