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Looking at the economy through steel: In 2019, the world is expected to grow in addition to Asia!
On December 10th, the Metallurgical Industry Planning and Research Institute released the 2019 global steel demand forecast results in Beijing. Forecast results show that in 2019, global steel demand was 1.711 billion tons, an increase of 0.2%. In addition to Asia, demand for steel in most parts of the world will continue to grow at different rates.
The above-mentioned institutions said that since the beginning of this year, the global economy has continued to grow moderately, but the momentum has weakened. The growth of major economies, inflation levels and monetary policy differentiation are obvious, the US economy has exceeded market expectations; capital outflows in some emerging economies have intensified, and financial markets have continued to fluctuate. Next year, the global economy will still be affected by US policies, and the downward pressure on the economy will increase. Overall, the growth of developed economies will weaken. In emerging markets and developing economies, the economic activities of energy exporting countries continue to improve gradually, but the economic activities of some importing countries have weakened.
The International Monetary Fund (IMF) predicted in the World Economic Outlook released in October 2018 that the global economic growth rate in both 2018 and 2019 was 3.7%, of which advanced economies were 2.4% and 2.1%, respectively. Markets and developing economies are both 4.7% in 2018 and 2019.
From the perspective of changes in steel demand forecast in major regions of the world, in 2018, except for South America, demand for steel in various regions showed an increasing trend. Global steel consumption is expected to be 1.707 billion tons, up 7.6% year-on-year. In 2019, except for Asia, steel demand in most parts of the world will continue to grow, but growth in some regions has declined. Global demand for steel is forecast at 1.711 billion tons, up 0.2% year-on-year.
Look at the subregion. Affected by the geopolitical situation and escalating trade tensions, the momentum of economic growth in Europe has weakened in 2018; due to the uncertainty and risks of the external and internal environment, the economic growth rate in Europe will further decline in 2019. European steel consumption is expected to reach 209 million tons in 2018, up 2.2% year-on-year; in 2019, European steel demand is about 213 million tons, up 1.9% year-on-year.
Affected by the economic factors, and considering the relatively developed manufacturing industry in some CIS countries and the acceleration of real estate construction, it is predicted that the demand for CIS steel in 2018 and 2019 will be 51 million tons and 52 million tons respectively. Growth of 2.0%.
According to the current economic development status and prospects of major countries in North America this year and next, the developed economies of North America, represented by Canada and the United States, continue to develop steadily. Steel consumption in North America is expected to be 151 million tons in 2018, up 1.9% year-on-year; steel demand in 2019 is 153 million tons, up 1.3% year-on-year.
South America's economic recovery is not enough. Considering the weak industrial base in South America, the steel consumption is limited, and the demand for steel in South America may decline slightly. The demand for steel in South America in 2018 and 2019 is forecast to be 44 million tons, down 2.2% year-on-year and flat.
In 2018, economic growth in some parts of Africa was good, with East Africa's economic performance outstanding. The region's GDP growth rate in 2018 exceeded 5%. In the future, infrastructure construction and manufacturing in the African region have great development potential, and their resource advantages are more attractive to foreign investors, and their development prospects are promising. Demand for African steel in 2018 and 2019 is forecast to reach 36 million tons and 37.4 million tons respectively, up 3.1% and 3.9% respectively.
In recent years, the geopolitical crisis in the Middle East has been frequent, the threat of war has continued, and the global monetary policy has continued to tighten, and the protectionism of Western countries has intensified. The development and reform of the Middle East countries are facing many difficulties. The demand for steel in the Middle East is forecast to be 57.5 million tons and 59 million tons in 2018 and 2019, respectively, an increase of 2.6% year-on-year.
Thanks to the record low bank interest rates, the increase in iron ore, coal and natural gas exports, and the expansion of infrastructure and residential construction, Oceania’s economic growth is better. Steel demand in 2018 and 2019 is forecast to be 6.5 million tons and 6.6 million tons respectively, up 1.8% and 1.5% respectively.
The most noteworthy is Asia. In recent years, Asia has continued to lead the global economy with its strong economic growth. The above-mentioned institutions believe that Asia will continue to be a leader in global economic growth in the coming period, but it will also face complex environments such as economic fluctuations, an aging population, and international trade protectionism. It is estimated that in 2018 and 2019, Asian steel demand will be 1.152 billion tons and 1.146 billion tons, respectively, up 8.8% and 0.5% year-on-year.
In October of this year, the World Steel Association also released a forecast of global short-term steel demand in 2018 and 2019. It is predicted that global steel demand will reach 1,657.9 million tons in 2018, an increase of 3.9% year-on-year (because China did not include it before the fight against “strip steel”, the actual global growth rate in 2018 was 2.1%). Global steel demand will increase by 1.4% in 2019 to reach 1.6812 billion tons.
In this regard, Al Remeithi, chairman of the World Steel Association Market Research Committee, pointed out: "This year, due to the recovery of the investment market in the developed economies of the world and the outstanding performance of emerging economies, global steel demand continues to perform strongly. Global steel demand is expected to continue to grow moderately in 2019, The increase was 1.4%."
It is worth noting that the World Iron and Steel Association also believes: "Without the stimulation of policy measures, China's steel demand growth is expected to slow down."
The agency said that in the first half of 2018, the micro-stimulus of China's real estate steel demand and the strong recovery of the global economy boosted China's steel demand. However, as China continues to deepen economic restructuring and introduce more stringent environmental protection measures, it is predicted that China's steel demand growth will decelerate from the end of 2018 to 2019.
At the same time, China's economic downturn and upside risks coexist. The downside risks come from the ongoing trade friction between China and the US and the gradual slowdown in the global economy. However, if the Chinese government decides to take stimulus measures to control the possible slowdown of the Chinese economy in the economic environment, then steel demand in 2019 will be boosted.
Regarding the Chinese market, the agency pointed out that starting in 2017, China will continue to shut down most of the backward intermediate frequency furnace capacity, which is not included in the officially released production statistics. Therefore, the nominal growth rate of China's steel demand is expected to increase to 6.0% in 2018, but the dynamics from the steel industry show that the actual growth rate is only 2%. Therefore, the actual global growth rate in 2018 is 2.1%.
New edition of steel development guidance or the end of the year