Steel Demand Growth Facing Cyclical Upturn

Steel is an important metal used across the globe. Steel is mainly consumed in larger quantities by end-users such as the infrastructure and construction sectors. The production process of steel is energy-intensive.

- Alireza Moghadam

Technological progressions and extensive R&D such as use of generated energy from the system itself have decreased the consumption of energy in the production process. This has assisted in the reduction of greenhouse gas emissions once the latest processes are successful. This will also resist climate changes due to pollution occurring across the globe, which has become a serious environmental issue in recent years.

 

Thus, the consumption of steel as a sustainable material is the latest trend that is projected to assist the growth of the market during the forecast period.

In 2017, the risk of global recession receding and economic performance improving across most regions along with several geopolitical changes still created some concern. US policy uncertainties, Brexit, the rising populist wave in the current European elections and the potential retreat from globalisation and free trade under the pressure of rising nationalism adds a new dimension of uncertainty in investment environments. To balance this, risks from ongoing conflicts in the Middle East and in Eastern Ukraine appeared to be reducing.

There is some good news for steel producers around the world. After years of wait characterised by slowing demand, excess capacity and large inventory, facing headwinds that slowed consumption in recent years, world steel demand growth is beginning to face a cyclical upturn. Consumption demand is expected to pick up on the back of the momentum in global economic growth.

Based on the demand conditions so far, this year, the World Steel Association, in its short-range outlook, has forecasted that global steel demand will reach 1,622 million tons (mt) in 2017 and will improve to 1,648 mt in 2018.