The World Steel Association has released an update on the Short Range Outlook (SRO) for steel demand in 2024 and 2025. They predict a 0.9% drop in global steel demand this year, totaling 1,751 million tonnes (Mt). After three years of declines, a recovery in global steel demand (excluding China) is expected in 2025, with a forecasted increase of 1.2% to reach 1,772 Mt
Most major economies, including China, are experiencing weak manufacturing and global economic challenges, leading to downward revisions in steel demand forecasts for 2024. China is expected to see a significant decline in steel demand, while India is projected to maintain strong growth in 2024 and 2025. Other developing economies are also expected to rebound in steel demand after recent slowdowns.
Despite challenges such as high costs and geopolitical uncertainties, there is cautious optimism for moderate global steel demand growth in 2025. Key factors influencing this outlook include the stabilization of China’s real estate sector, the effectiveness of interest rate changes, and investments in infrastructure.
China’s steel demand is expected to drop by 3.0% in 2024 and another 1.0% in 2025, primarily due to the ongoing downturn in its real estate sector. However, there is potential for a stronger recovery in 2025 if the government increases support for the economy.
In developing countries (excluding China), steel demand is projected to grow by 3.5% in 2024 and 4.2% in 2025, largely driven by India’s growth and a rebound in other emerging economies.
India continues to be a strong driver of steel demand, with an anticipated 8.0% increase in 2024 and 2025, thanks to growth in all sectors, particularly infrastructure investments. Other emerging markets, such as those in the MENA and ASEAN regions, are also expected to recover in 2024 after a slowdown.
In contrast, developed countries are forecasted to see a 2.0% decrease in steel demand in 2024, with significant declines in the US, Japan, Korea, and Germany. However, a recovery is anticipated in 2025, with a projected growth of 1.9% in steel demand, driven by improvements in the EU and modest recoveries in the US and Japan.
Global manufacturing activity has been weak, contrary to earlier expectations for recovery in 2024. The sector experienced a downturn due to high costs and economic uncertainty, leading households and businesses to postpone durable goods purchases. Inflation has reduced the purchasing power of many families, further dampening demand for manufactured goods.
Despite these challenges, there is cautious optimism for a potential recovery in global manufacturing in 2025, supported by easing financing conditions and increased real income in major economies.
Housing construction has been low in many key markets throughout 2024, impacting steel demand, particularly in China, the US, the EU, Japan, and Korea. After a period of strong growth fueled by low interest rates, housing activity sharply declined in 2023 due to rising borrowing costs. A recovery in residential construction is expected in 2025 with easier financing conditions.
The automotive sector, which saw double-digit growth in 2023, is anticipating a significant slowdown in 2024. Light vehicle production forecasts have been lowered due to rising inventories and a decrease in electric vehicle sales. Modest growth in global light vehicle production is expected in 2025.
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