Global apparent steel use will increase by 2% to 1.56 billion tonnes in 2014 following growth in 2013 of 3.8%. In 2015 world steel demand will grow by another 2% to 1.59 billion tonnes, according to worldsteel's short range outlook, which was presented to delegates at the 48th World Steel Conference in Moscow.

Hans Jürgen Kerkhoff, chairman of the worldsteel economics committee, said that the positive momentum in global steel demand seen in the second half of 2013 abated in 2014 with weaker than expected performance from the emerging and developing economies. "As a consequence we are issuing a lower steel demand growth figure than our forecast released in April this year," Mr Kerkoff said.

Kerkoff explained that the slowdown in China’s steel demand reflected the structural transformation of the economy and contributed significantly to worldsteel's lower global growth projection. "We have also seen major slowdown in South America and the CIS countries due to falling commodity prices, structural constraints and geopolitical tensions," he said, adding that, in contrast, the developed economies fared well and that recoveries in the European Union, the USA and Japan were stronger than previously thought – but not strong enough to offset the slowdown in the emerging economies.

According to Kerkoff, steel demand growth in developed economies is expected to be moderate in 2015, while growth in the emerging and developing economies are projected to pick up. He said that China's rebalancing act will continue to act as a drag on steel demand.

The World Steel Association believes that its outlook is 'prone to risks coming from various fronts'. One such risk is that US interest rates are expected to increase in 2015 and this is likely to impact global capital flows creating instability in vulnerable emerging markets where structural reforms and geo-political tensions caused by global energy prices have emerged as a new risk factor. China's transition towards a consumption-driven economy is not without challenges, claimed Kerkoff, and the recovery in the Euro-Area is still constrained by household and government deleveraging.

In China, apparent steel use is expected to slow to just 1% growth in 2014 (748.3Mt) as the Chinese real estate sector cools off and the government’s efforts to rebalance the economy curtails investment and weakens business sentiment. Weak growth momentum is expected to continue into 2015 when China’s steel apparent steel use will grow by 0.8% to reach 754.3Mt. Possible use of targeted stimuli and easing of restrictions on the real estate market in response to slower GDP growth could increase the forecast.

In India the outlook is improving thanks to the election of a new government promising pro-business reforms. In 2014, India’s steel demand is expected to grow by 3.4% to 76.2 Mt, following growth of 1.8% in 2013. Structural reforms and improving confidence will support a further 6% growth in steel demand in 2015, but elevated inflation and fiscal consolidation remain key downside risks.

In Japan, steel demand in 2014 is revised upward to increase by a further 2.3% to 66.8 Mt following a 2.1% increase in 2013. However, as the positive impact of “Abenomics” fades away and with another consumption tax hike on the cards, steel demand is expected to decline by -1.5% in 2015.

In the USA, steel demand is increasing by 6.7% to 102.2 Mt in 2014, a large upward revision, helped by strong growth in the automotive and energy sectors. Steel demand is expected to increase by 1.9% in 2015 and in Mexico steel demand is expected to grow by 6.9% this year and by a moderate to 3.5% in 2015.

Apparent steel use forecasts in Central and South America have been revised down with most countries registering negative growth and an expected to decline by -2.4% to 48 Mt in 2014 from 4.2% growth in 2013. The region's woes are attributed to falling commodity prices and delayed structural reforms, which are hurting steel demand across the region. Steel demand is expected to increase by 3.4% in 2015. In Brazil, apparent steel use will contract by -4.1% in 2014 to 25.3Mt and will rebound by just 1.5% in 2015 due to high inflation, over-valued currency, high labour costs and infrastructure bottlenecks, all of which are curtailing investment activities.

In the EU (28) the steel demand outlook has grown by 4% to 145.9 Mt after increasing by 0.8% in 2013. The improvement reflects a pick-up in steel using sectors in most countries, but notably the UK and Poland and those countries that underwent structural reforms. While apparent steel use in 2015 is projected to grow by 2.9%, the EU is facing disinflation and geopolitical tensions which threaten the continued recovery. Apparent steel use in Germany is expected to grow 3.2% to 39.1 MT in 2014 and by 2.3% in 2015.

In CIS apparent steel use figures have been revised down significantly in 2014 by -3.8% to 56.9 Mt following 2.8% growth in 2013 due to the crisis in Ukraine. In Russia, the weak trend in steel using sectors in the second half of 2013 continued, and in 2014 weak infrastructure investments combined with the impact of geopolitical tensions to constrain steel demand, leading to -0.5% growth (43.2 Mt). Recovery is expected in 2015 when growth is expected to reach 1.1% (43.7Mt). The conflict in Ukraine is a severe blow to the country's economic activity. Apparent steel use is expected to decline by -19% in 2014. In the CIS, growth of 1.9% in 2015 is expected, but this is assuming that the political situation stabilises.

MENA steel demand in 2014 has been revised down due to the political instability, but is expected to grow by 3.3% to 67.6 Mt and by 6.6% in 2015 due to the strength of oil-producing countries in the region.
Overall apparent steel use in the developed economies will register over 4% growth in 2014, but will slow to 1.7% in 2015. Emerging and developing economies, excluding China, will grow by 1.7% in 2014, followed by a rebound of 4.7% growth in 2015.