worldsteel presented its outlook for global steel demand during the Platts Steel Markets Asia Conference held in Mumbai on 17-18 November 2016.
The good news is that our forecast suggests that global steel demand is through the bottom of the cycle.
Global uncertainties originating from geo-political tensions, Brexit, doubts on the efficiency of monetary policies in developed economies and implementation of structural reforms in developing economies of course make analysis more difficult. Although these heightened uncertainties do point to downside risks for steel demand growth, these are for the moment largely contained to a regional level.
A bright spot and one to keep an eye on is the emerging market in Asia. A young population, an abundance of natural resources and a strong agenda for reform are creating opportunities for manufacturing and infrastructure projects within the region.
The discussions during the Platts Conference were dominated by topics related to the Chinese steel market, especially trade tensions and excess capacity. India was obviously also at the centre of the talks. Unlike in the developed economies and China, where steel demand growth is weak, India’s steel demand has bright prospects. However, there were concerns that India may face similar criticisms to China if new capacities lay the ground for overcapacity.
It was interesting to hear insights from the main Indian steel producers as well as the Ministry of Steel. In recognising the strong demand growth, it is also essential to take into account the fact that India is not a “one speed” growth economy; the complexity of the country as well as a clear understanding of the dynamics behind each different state have to be considered.
To sum up, the long-term forces affecting steel demand need to be thoroughly examined so that we are better prepared and able to respond to the upcoming challenges and opportunities that lie ahead.
If you would like to find out more about the global demand outlook we presented at this meeting, you can view my presentation in the link on the top right hand side of the page.
We look forward to your comments on the opportunities and challenges that lie ahead.