Global apparent steel use will increase by 0.5% to 1.54 billion tonnes in 2015 following growth of 0.6% in 2014. World steel demand will grow by 1.4% in 2016.

The World Steel Association’s Short Range Outlook, which was released on 20 April, is described by worldsteel’s economics committee chairman as a ‘restrained growth outlook’ mainly due to the deceleration of China.

“The outlook also reflects the influence of major structural adjustments in most economies, particularly owing to limited investment growth post 2008,” said Kerkhoff, adding that the steel industry can expect a slower pace of growth.

Kerkhoff said that the risks implicit in geopolitical instability and international capital flow volatility, not forgetting China’s slowdown, were much reduced but still very much alive.

“We have also started to see some encouraging developments,” said Kerkhoff, referring to signs of ‘firming recovery momentum’ in the Eurozone, increased optimism in India and signs of growth in steel use in some ASEAN and MENA countries.

While steel markets in some developing countries exhibit market maturity, Chinese steel demand showed negative growth in 2014 for the first time since 1995. This, claims worldsteel, was due to the Chinese government’s rebalancing efforts having a major impact on real estate and will remain unchanged in the short term and steel usage in China will show negative growth of -0.5% throughout 2015 and 2016.

As China’s rebalancing act continues, there will be continued trade friction globally due to increasing Chinese steel exports.

As weak investment activity and unemployment continues to constrain the developed world – and despite growth in steel demand of 6.2% in 2014 – growth will be ‘moderate’ in 2015 because of less favourable steel market environments in the US, Japan and South Korea. Steel demand in the developed economies will grow by 0.2% this year and by 1.8% next year.

The continued deterioration in the Russian and Brazilian steel markets have led to low growth in the developed economies of 2.3% in 2014 and will remain weak throughout 2015. However, positive growth can be expected in India, Indonesia, Vietnam and Egypt, countries where steel markets are still developing.

Steel demand are expected to grow by 4% in 2016 following growth of 2.4% this year.