While global steel demand is expected to increase by 1.8% this year, Turkiye’s steel demand is expected to increase by a record 19%.
According to the Short-Term Outlook report of the World Steel Association (worldsteel), global steel demand started to grow this year after a 3.3% contraction last year.
It is predicted that world steel demand will increase by 1.8% this year, and this growth will increase to 1.9% next year.
Turkiye’s steel demand is expected to increase by a record 19% this year and the growth is expected to continue in 2024. The reconstruction process after the earthquakes centered in Kahramanmaras is the driving force in the increase in demand in Turkiye.
While China’s steel demand is expected to grow by 2% this year with infrastructure investments and the stabilization of the real estate sector, the outlook for the country’s steel demand in 2024 remains uncertain.
While it is stated that high energy costs and interest rates have hit manufacturing activities hard in the European Union (EU), steel demand is expected to increase by 5.8% in 2024, after a 5.1% contraction this year.
In the USA, where high interest rates affect steel-using sectors, it is estimated that steel demand will decrease by 1.1% this year and will trend to grow at 1.6% in 2024.
China and geopolitical tensions create uncertainty for steel demand
In his assessment of the report, Maximo Vedoya, Chairman of the worldsteel Economic Committee, stated that steel demand has felt the impact of high inflation and interest rates and has decreased sharply since the second half of 2022 with the weakening of investment and consumption.
Noting that this situation continues this year, especially affecting the EU and the USA, Vedoya said:
“Considering that the effects of tight monetary policy are reflected from behind, we expect the recovery in steel demand in 2024 to be slow. Demand in developing economies is expected to grow faster than in developed economies. We expect the situation in the Chinese real estate market to stabilize in the second half of the year and China’s steel demand to register slightly positive growth thanks to government measures. China’s 2024 outlook remains uncertain, depending on policy directions to overcome current economic challenges. We note that the Chinese economy is in a structural transition phase that may create volatility and uncertainty. Other uncertainty is linked to regional conflicts in Russia and Ukraine, Israel and Palestine, and elsewhere. This could lead to rising oil prices and further geo-economic division.”
Vedoya added that despite the weakening of construction activities due to high interest rates, infrastructure investments are showing a positive momentum in many regions and even in developed economies, reflecting the impact of decarbonization efforts.
Source: AA / Prepared by Irem Yildiz