KOLKATA: World Steel Association has said steel demand is expected to pick up InIndia and demand expected to grow by 5.9% to 75.8 million tonne (mt) in 2013 following 2.5 % growth in 2012. The WSA which released its short term outlook for 2013 and 2014 in Brussels on Thursday said in case of India, steel demand is likely to grow due to monetary easing which is is expected to support investment activities. In 2014, growth in steel demand is expected to further accelerate to 7.0% thanks to the reform measures aimed at narrowing the fiscal deficit, coupled with measures to improve the foreign direct investment climate.
WSA said global apparent steel use will increase by 2.9% to 1454 mt in 2013, following a 1.2% growth in 2012. In 2014, it sis forecast that world steel demand will grow further by 3.25 to reach 1500 million tonne.
Hans Jurgen Kerkhoff, Chairman of the worldsteel Economics Committee said: "2012 was a challenging year for the steel industry with apparent steel use increasing at the slowest rate since 2009 when demand declined by -6.5%. This was mainly due to the Eurozone crisiswhich persisted throughout 2012 and whose impact was felt further afield. On top of this, corrective macroeconomic measures in major emerging economies also contributed to a concerted slowdown globally.
"However, in the early part of 2013, the key risks to the global economy - the Eurozone crisis, a hard landing for the Chinese economy, and the US fiscal cliff issue - have all stabilised considerably and we now expect a recovery in global steel demand to kick in by the second half, led by the emerging economies. Yet, the situation on the financial markets remains fragile and the Eurozone crisis is far from being solved as the recent events in Cyprus have again shown. In 2014, we expect a further pickup in global steel demand with the developed economies increasingly contributing to growth."
In 2013, in the US, after growth of 8.4% in 2012 due to the automotive and energy sectors and an increasingly resilient construction recovery, apparent steel use is forecast to grow by 2.7% to 99.3 Mt due to continuing fiscal concerns. In 2014, steel demand is expected to increase by 2.9%, thus exceeding 100 Mt with the help of positive momentum from the construction sector. For NAFTA as a whole, apparent steel use will grow by 2.9% and 3.0% in 2013 and 2014 respectively, WSA said in its outlook.
Steel demand in Japan is expected to decline for the second consecutive year in 2013 by -2.2% to 62.6 Mt due to contracting shipbuilding and automotive sectors despite a positive boost from the construction sector. In 2014, it is expected to contract again by -0.6%. This is due to an end of fiscal stimulus and structural factors, for example, increasing relocation of production by Japanese manufacturers overseas.
Apparent steel use in China is expected to grow by 3.5% in 2013 to 668.8 Mt following a 1.9% increase in 2012. In 2014, steel demand is expected to grow by 2.5% as the Chinese government's measures to control investment in an effort to rebalance the economy will remain in place.