The demand for steel worldwide will further drop by 0.9 per cent in 2024 but will likely see a broad-based recovery, except in China, and rebound by 1.2 per cent in 2025, the World Steel Association (worldsteel), whose members represent 85 per cent of global steel production, said.

In its latest short-range outlook, worldsteel said the demand will decrease to 1,751 million tonnes (mt) in 2024 but would climb to 1,772 mt in 2025. Earlier in the year, worldsteel in its short-range outlook had forecast that demand will see a 1.7 per cent this year rebound this year to reach 1,793 mt. The association had pegged 2023 crude steel at 1,831.5 mt, up 1.8 per cent compared with 2022.

The ongoing weakness in housing construction — which is driven by tight financing conditions and high costs — has been cited as the reason for the sluggish demand for steel. Martin Theuringer, Managing Director, German Steel Association and Chair of the worldsteel Economics Committee, said, “2024 has been a difficult year for global steel demand as the global manufacturing sector continued to grapple with persistent headwinds such as declining household purchasing power, aggressive monetary tightening, and escalating geopolitical uncertainties.”

India going strong

worldsteel made significant downward revisions to its 2024 steel demand outlook for most major economies, including China, reflecting the persistent weakness in manufacturing alongside lingering global economic headwinds. The association predicts a notable decline in steel demand in China and most major developed economies in 2024. In stark contrast, it forecasts India to maintain its strong momentum, with robust growth in steel demand projected for both 2024 and 2025. India has emerged as the strongest driver of steel demand growth since 2021, and this trend is set to continue, it said. It maintained its robust growth projections for India, anticipating an 8 per cent increase in steel demand over 2024 and 2025, fuelled by growth across all steel-consuming sectors, especially by continued strong growth in infrastructure investments.

In fact, the association is optimistic about the prospects of most developing economies. Most other major developing economies are expected to witness a rebound in steel demand in 2024, recovering from the slowdown experienced in 2022-2023, it said. It said steel demand in the developing world excluding China is projected to grow by 3.5 per cent in 2024 and 4.2 per cent in 2025.

But the developed world is set for a rather lacklustre 2024 and is projected to experience a 2 per cent decrease in steel demand in 2024, as major steel-using economies like the US, Japan, Korea and Germany face significant declines. However, there is optimism for 2025, with a projected growth of 1.9 per cent in developed world steel demand on the back of the long-awaited upturn in steel demand in the EU, and modest recoveries in the US and Japan.

Worrisome China

worldsteel said steel demand in China continues to be bleak, due to the problems faced by the Chinese real estate sector. It said the ongoing downturn in the Chinese real estate sector is expected to dominate steel demand in China, resulting in a 3 per cent decline in 2024 and a further 1 per cent dip in 2025. However, the association said there is a growing possibility of more substantial government intervention and support for the real economy, which could bolster Chinese steel demand in 2025. It is to be noted that China had reported a huge fall in steel production y-o-y in the last couple of months, dropping by 9 per cent and 10.4 per cent in July and August, respectively.

Hopeful about 2025

Despite ongoing challenges posed by factors such as lingering effects of monetary tightening, elevated costs, limited affordability, and geopolitical uncertainties, worldsteel is cautiously optimistic that global steel demand will enter a phase of broad-based moderate growth in 2025.

“The key determinants of the global steel demand outlook for 2025-26 will be the progress made in the stabilisation of China’s real estate sector, effectiveness of interest rate adjustments in spurring private consumption and business investment, and the trajectory of infrastructure spending dedicated to decarbonisation and digital transformation across major global economies,” the global steel body said.

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