Global steel demand growth will decelerate next year as China’s real estate market weakens and consumption in Japan falls, the World Steel Association said.
Consumption growth will slow to 5.3 percent next year, from a forecast 13.1 percent gain this year, the association said in a statement released in Tokyo. China and Japan are the world’s biggest and second-largest steel producing nations.
Slowing demand in China, where the government has introduced measures to dampen property speculation, led 40 percent of Chinese mills to idle plants or put them on maintenance, the China Iron & Steel Association said in August.
Consumption in India, Central and South America will drive global growth, said the association, whose members produce about 85 percent of the world’s steel.
Consumption could reach a record 1.34 billion tonnes next year, said the association, which is holding its annual meeting in Tokyo this week.
Chinese demand is likely to increase 3.5 percent next year, down from a projected 6.7 percent this year, the group said.
Steel demand in Japan will probably fall 1.4 percent next year after a recovery of 19.1 percent this year because of a tighter fiscal policy and a stronger yen, the association said.
“Construction activity in Japan is still in a prolonged slump, the cost of raw materials is climbing and the Japanese currency, the yen, continues to strengthen,” Japan Iron and Steel Federation chairman Eiji Hayashida said at the meeting.
“These and other challenges make the outlook uncertain for the operating environment surrounding the Japanese steel industry,” he said.
Hayashida is also the president of Tokyo-based JFE Holdings Inc’s steel unit.
India will become the largest steel consumer after China and the US next year, with growth of 8.2 percent and 13.6 percent expected this year and next respectively, the association said.
Steel demand in Brazil is forecast to rebound 34.6 percent this year and consumption in the Central and South American regions will likely gain 9.1 percent to a record 47.6 million tonnes next year, it said.
Global steel consumption this year is rising faster than the association’s estimate of 8.4 percent growth, made in April last year, on a stronger-than-expected recovery in developed nations after the global financial crisis.
Still, steel demand next year in the US, Europe and Japan is likely to be more than 20 percent lower than 2007 levels, the association said.
“Economies in developed countries have yet to recover to the pre-Lehman [Brothers] shock levels, while demand in China, India and other emerging economies have exceeded 2007 levels,” said Hajime Bada, who was named to become chairman of the association.
Apparent steel use in the US will likely advance 32.9 percent this year and increase 9.4 percent next year, the group said.
Steel use in the EU will rise 18.9 percent this year and gain 5.7 percent next year, it said.
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