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The forecast of short-term steel demand

Global steel demand of structural steel pipe will continue to grow, driven by growth in developing and emerging economies, despite the uncertain global economic environment. Commenting on the forecast, Mr AlRemeithi, chairman of the world steel association’s market research committee, said: “our forecasts show that global steel demand will continue to grow faster than expected in 2019, mainly in China, despite the current challenging environment.Steel demand in the rest of the world slowed in 2019 as economic uncertainty, trade tensions and geopolitical issues weighed on investment and trade.Manufacturing, particularly cars, has fallen sharply in many countries, while the construction sector has slowed but remains in good shape. The future outlook for the global economy remains highly uncertain and we expect global steel demand to grow by another 1.7% in 2020, driven by demand growth in emerging and developing economies.If the current uncertainty continues, this forecast will face significant downside risk.

By contrast, China’s manufacturing sector is experiencing a significant slowdown, hit by the combination of a slowing economy and trade tensions, and Chinese auto production of mild steel tube has declined for 13 straight months. As pending trade tensions continue to weigh, we expect the Chinese economy to continue to decline in the second half of 2019 and into 2020.The government is unlikely to introduce another big stimulus, which would balance slowing growth with promoting structural adjustment, and more likely to offer modest stimulus, focusing on infrastructure and boosting consumers’ purchasing power through tax cuts.The auto industry is likely to benefit from these incentives in 2020, with steel demand of rectangular hollow section in China expected to grow 1.0 percent.

Steel demand in developed economies is expected to decline slightly by 0.1 percent in 2019, following a 1.2 percent increase in 2018, while the consumer and construction sectors continue to show positive growth momentum, while manufacturing declines due to deteriorating exports and investment conditions. Steel demand in advanced economies is expected to grow 0.6 per cent in 2020, helped by a technical rebound. Steel demand of galvanized steel pipe in developing economies (excluding China) is mixed.Infrastructure investment is expected to lead steel demand growth to rebound to 4.1 per cent in 2020, particularly in Asia. Construction activity in emerging markets has been strong, driven mainly by infrastructure projects. China’s real estate market led the growth of the construction market in 2019, which will slow in 2020.Infrastructure investment is expected to be boosted by government stimulus measures.Turkey’s construction market contracted in line with the economy, and after a severe downturn in 2019, Turkey will see a modest rebound in 2020. Infrastructure growth in Latin America is constrained by economic uncertainty.

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