The World Steel Association (worldsteel) released its April 2018 Short Range Outlook (SRO) yesterday. Worldsteel forecasts global steel demand will reach 1,616.1 Mt in 2018, an increase of 1.8% over 2017. In 2019, it is forecast that global steel demand will grow by 0.7% to reach 1,626.7 Mt. Commenting on the outlook, T.V. Narendran, Chairman of the worldsteel Economics Committee noted that in the next couple of years the global economic situation is expected to remain favourable with high confidence and strengthening recovery of investment levels in advanced economies. Benefitting from this, steel demand in both developed and developing economies is expected to show sustained growth momentum with risks relatively limited. However, possible adverse impact from rising trade tensions and the probable US and EU interest rate movements could erode this current momentum.
Upside and downside risks to this forecast are mostly balanced. In 2018, high confidence, strong investment levels and a recovery in commodity prices are generating a virtuous cycle for steel demand globally both in developed and developing economies. The slight deceleration in 2019 will be due to further deceleration in China and weakened investment momentum due to higher interest rates. On the downside, possible escalation of trade tensions, rising inflationary pressure and tightening of US and EU monetary policies may cause financial market volatilities and trouble highly indebted emerging economies.