It is forecasted that global steel demand will grow by 1.4 per cent to reach 1,681.2 million tonnes in 2019.(Photo: SAM PANTHAKY/AFP/Getty Images).

As India recovers from the twin shocks of demonetisation and the goods and services tax (GST) implementation, India’s steel demand is expected to move back to a higher growth track, said World Steel Association (worldsteel) on Tuesday (16).

“Steel demand will be supported by improving investment and infrastructure programs. Stressed government finances and corporate debt weighs on the outlook,” it added.

In the developed economies, growth in the construction sector is likely to moderate after the strong recovery momentum seen in 2017-18 due to a high base and rising interest rates. On the other hand, construction activities in most developing economies will continue to grow, notably in India, ASEAN, and MENA. However, Brazil’s construction sector has not yet started to recover from its deep crisis.

Sluggish construction activities and stock adjustments led to slow growth of steel demand in the ASEAN region in 2017 and 2018, but demand in the ASEAN region is expected to resume its growth momentum backed by infrastructure programmes in 2019 and onwards.

Risks are largely related to rising trade tensions between the US and China, currency volatilities and political instability.

Steel demand in developing Asia excluding China is expected to increase by 5.9 percent and 6.8 per cent in 2018 and 2019 respectively, whereas demand in the emerging economies excluding China is likely to grow 3.2 per cent and 3.9 per cent in the current and next calendar year respectively.

Both the downside and upside risks exist for China. Downside risks come from the ongoing trade friction with the US and a decelerating global economy. However, if the Chinese government decides to use stimulus measures to contain the potential slowdown of the Chinese economy in the face of a deteriorating economic environment, steel demand in 2019 will be boosted.

Meanwhile, global steel demand is to reach 1,657.9 million tonnes in 2018, an increase of 3.9 per cent over 2017. It is forecasted that global steel demand will grow by 1.4 per cent to reach 1,681.2 million tonnes in 2019.