The World Steel Association recently released its Short Range Outlook for 2024 and 2025, revealing a challenging landscape for global steel demand. The report forecasts a decline of 0.9% in steel demand for 2024, bringing the total to approximately 1,751 million metric tons. This downturn is attributed to persistent global economic headwinds, including inflationary pressures, high financing costs, and geopolitical uncertainties. However, a broader recovery is anticipated in 2025, with demand projected to rise by 1.2% to reach 1,772 million metric tons, particularly outside of China.
Dr. Martin Theuringer, Managing Director of the German Steel Association and Chair of the worldsteel Economics Committee, elaborated on the factors affecting the steel market. He pointed out that the global manufacturing sector continues to struggle, driven by decreasing household purchasing power and tightening monetary policies. The housing construction sector, particularly in major economies, has also been sluggish, further impacting steel demand. These trends have led to significant downward revisions in steel demand projections for several key markets, including China and many developed economies.
China, a dominant player in the global steel industry, is expected to experience a notable decline in steel demand, projected at 3.0% for 2024 and a further 1.0% in 2025. The ongoing challenges in China's real estate sector are a primary contributor to this decline. However, there are potential upsides; increased government intervention could bolster demand if the real economy receives more support. In contrast, India is emerging as a beacon of growth, with steel demand projected to increase by 8.0% over the next two years, driven by robust infrastructure investments and growth in various sectors.
In developing economies outside of China, steel demand is expected to grow significantly, with projections of 3.5% growth in 2024 and 4.2% in 2025. This rebound is largely attributed to the resilient economic growth in India and recovering markets in the Middle East and ASEAN regions. The anticipated recovery follows a slowdown experienced during 2022-2023, highlighting the potential for a more balanced global steel market in the near future.
In the developed world, the outlook is mixed. A 2.0% decrease in steel demand is anticipated for 2024, particularly affecting major economies like the US, Japan, Korea, and Germany. However, there is cautious optimism for 2025, with projected growth of 1.9%. This recovery is expected to be driven by improved conditions in the EU and modest recoveries in the US and Japan. The anticipated uptick is vital for restoring confidence in these markets, which have faced significant challenges recently.
Despite these challenges, there are indicators of potential recovery in global manufacturing. Easing financing conditions and pent-up consumer demand may support an uptick in manufacturing activities in 2025. Additionally, the housing sector is expected to rebound, particularly in the EU, US, and Korea, as financing conditions improve. This recovery could significantly influence steel demand, which has been heavily reliant on construction and manufacturing sectors.
Furthermore, the ongoing green transition is reshaping public infrastructure investments, increasing the demand for steel significantly. As global efforts to mitigate climate change intensify, the need for expanded electricity grids and renewable energy infrastructure will drive steel demand. The report estimates that this sector alone could require an additional 40 million metric tons of steel by the end of the decade, providing a substantial boost to the overall steel market.
In summary, while 2024 presents significant challenges for global steel demand, particularly in major economies like China, there is a cautious optimism for recovery in 2025. Key factors will include government interventions, economic stabilization efforts, and advancements in infrastructure projects aimed at sustainability. The landscape remains dynamic, with potential growth opportunities emerging, particularly in developing markets and sectors focused on green transformation.
