China’s steel demand will remain flat on year at 781 million mt in 2019 as the nation’s economy undergoes “rebalancing” and environmental regulations become more stringent, the World Steel Association said in a forecast.
This compares with its full-year growth forecast of 6% for 2018.
Chinese demand may just roll over in the next year on uncertainties arising from trade tensions, Saeed Al Remeithi, chairman of worldsteel’s economic committee, said at a media briefing at its general assembly in Tokyo.
“But if the government decides to put up stimulus to mitigate the impact [of the trade tensions], then we might see a change,” he said, adding that he saw infrastructure being an area the Chinese government may support.
Edwin Basson, director general of worldsteel, said there was “probably upside to our forecast” for Chinese demand, given that its predictions in the past few years have appeared conservative, following the Chinese government’s release of stimulus after worldsteel’s forecast.
Basson said the association has typically debated what Chinese steel demand would look like, as its economy has evolved to become one which appears to be “reaching an inflection point in demand.”
“Every year, we’re surprised to the upside,” Basson said. “The year before, it was the closures of the induction furnaces. So if there’s going to be any [deviation from our forecast], it’s going to be that China outperforms.”
ASIAN DEMAND TO GROW 1.3% IN 2019 Asian steel demand is forecast to grow 1.3% next year to 1.132 billion mt after growth of 5% in 2018, the association said.
Southeast Asia remained a bright spot for steel demand, with that in the five key economies of Indonesia, Malaysia, Philippines, Thailand and Vietnam forecast to grow 6.2% to 78.3 million mt in 2019, following growth of 3.8% predicted for 2018, worldsteel said.
“We’re quite hopeful that Southeast Asia is going to remain a strong point in the following number of years,” Basson said. “For a very long time, Southeast Asia has been playing an important role in making [markets] balanced,” noting that the region “sits amid a number of large exporters.”
Among the 10 biggest steel consuming countries, India is expected to see the largest growth in demand, with on-year growth of 7.5% in 2018 and 7.3% in 2019 to an estimated 102.3 million mt in 2019, it added.
Indian demand would see “overall very healthy growth,” driven by a gradual pick up in private and government investment and stimulus, Al Remeithi said.
The main risks to Indian steel demand growth are rising oil prices and stressed government finances, as well as tighter monetary policy, he added.
Source: Platts / Hellenic Shipping News