Global steel demand to enter low growth period: Worldsteel


Photo courtesy: Tata Steel Europe

Global steel demand is continuing to grow in the short term against a backdrop of great uncertainty as only a mild deceleration in global growth is now expected, World Steel Association Chairman Andre Gerdau Johannpeter said.  “However, in the long term, global steel demand is moving into a low-growth zone as new megatrends shape the industry,” Johannpeter warned.

“Steel demand is at another inflection point which may be followed by a prolonged period of low growth,” he said.

Steel demand is facing new challenges: the deceleration of population growth and aging populations in developing economies, rising income inequality threatening growth and the middle-class base. “Environmental concerns are also affecting the global steel sector, with sustainable development now “the crucial concept,” he said.

Global steel demand remains concentrated in China, which uses almost 50% of global steel production, but the market for steel in China is expected to grow just 1% this year to 843.3 million tonnes, while its steel production rate is expected to reach 930 million tonnes, up nearly 2%. In 2020, China’s steel demand is expected to fall to 834.9 million tonnes.

Politically driven uncertainties point to downside risks outside China: while steel demand from developed economies is moderating, emerging nations have a positive but mixed demand outlook, he said. In this scenario, India is expected this year to overtake the US to become the world’s second biggest user of steel but will still remain far below Chinese levels.

Worldsteel forecasts Indian steel consumption at 110 million tonnes in 2020, followed by the US at 101 million tonnes and Japan at 64 million tonnes.

Global steel production capacity was put at 2.235 billion tonnes in 2018, with consumption at 1.840 billion tonnes and overcapacity of 395 million tonnes, which remains the subject of international discussions and negotiations, the worldsteel executive said.

The location of this overcapacity was: 154 million tonnes in China; 81 million tonnes in the Commonwealth of Independent States; 80 million tonnes in Asia (outside China); 47 million tonnes in Europe; 26 million tonnes in Central and South America; 13 million tonnes in Oceania and the Middle East and North Africa; and minus 6 million tonnes in NAFTA.

Shekhar Ghosh is consulting editor, He has edited and written for publications like Business India, Business Standard, Business Today, Outlook and many other international publications. He can be reached at

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