Global steel demand to touch 1,616 MT in 2018: Report

In India, the demand is expected to accelerate gradually, mainly driven by public investment, worldsteel said in a report.

"worldsteel forecasts global steel demand will reach 1,616.1 MT in 2018, an increase of 1.8 per cent over 2017. In 2019, it is forecast that global steel demand will grow 0.7 per cent to reach 1,626.7 MT," it said.

T V Narendran, Chairman of the worldsteel Economics Committee said: "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."

Benefiting from this, steel demand in both developed and developing economies is expected to show sustained growth momentum with risks relatively limited, he said.

However, possible adverse impact from the rising trade tensions and the probable US and EU interest rate movements could erode this current momentum, Narendran who is also the CEO and Chairman of Tata Steel, said.

"Upside and downside risks to this forecast are mostly balanced," the report said.

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. There will be slight deceleration in 2019 due to further deceleration in China and weakened investment momentum due to higher interest rates, it said.

On the downside, possible escalation of trade tension, rising inflationary pressure and tightening of US and EU monetary policies may cause financial market volatilities and trouble highly indebted emerging economies, the report said.

Steel demand in the developed world is expected to increase by 1.8 per cent in 2018 and decelerate to 1.1 per cent in 2019.

The demand in emerging and developing economies excluding China, is expected to increase by 4.9 per cent and 4.5 per cent in 2018 and 2019, respectively.

The Indian economy is stabilising from the impact of currency reform and GST implementation and steel demand is expected to accelerate gradually, mainly driven by public investment, it said adding that stronger growth is held back by still weak private investment.

"Steel demand in ASEAN-5 countries dipped in 2017 due to slow construction activity and destocking. However, steel demand is expected to regain the growth momentum backed by infrastructure investment," said the report titled 'April Short Range Outlook'.