VISAKHAPATNAM: Having overcome the shocks of
demonetisation and the Goods & Services Tax (
GST) implementation, the Indian
economy
is now expected to achieve
faster growth
starting in the second half of 2019 after the election.
While the
fiscal deficit
might weigh on public investment to an extent, the wide range of continuing infrastructure projects is likely to support growth in steel demand above 7% in both 2019 and 2020, according to the
World Steel Association
’s (
worldsteel
) Short Range Outlook (SRO), released on Tuesday.
In the SRO emailed to TOI from Brussels, Belgium -- where worldsteel is headquartered, it forecast that the global steel demand will reach 1,735 million tonnes (mt) in 2019, an increase of 1.3% over 2018. In 2020, demand is projected to grow by 1% to reach 1,752 mt.
Commenting on the outlook, Al Remeithi, chairman of the worldsteel economics committee said, “In 2019 and 2020, global steel demand is expected to continue to grow, but growth rates will moderate in tandem with a slowing global economy. Uncertainty over the trade environment and volatility in the financial markets have not yet subsided and could pose downside risks to this forecast.”
According to the SRO, in 2018, global steel demand increased by 2.1% (after adjusting for China
induction furnace
closures), growing slightly slower than in 2017. In 2019 and 2020 growth is still expected, but in a less favourable economic environment. China’s deceleration, a slowing global economy, and uncertainty surrounding trade policies and the political situation in many regions suggest a possible moderation in business confidence and investment.
“Chinese steel demand continues to decelerate as the combined effect of economic rebalancing and trade tension is leading to slowing investment and sluggish manufacturing performance. Mild government stimulus cushioned the economic slowdown in 2018. In 2019, the government is likely to heighten the level of stimulus, which is expected to boost steel demand,” it said.
Steel demand in the developed economies grew by 1.8% in 2018 following a resilient 3.1% growth in 2017. “We expect demand to further decelerate to 0.3% in 2019 and 0.7% in 2020, reflecting a deteriorating trade environment,” the SRO of worldsteel said.
“As pent-up demand and government stimulus measures subsided, the automotive industry saw a sharp slowdown in growth in 2018 in many countries, in particular in the EU, Turkey and China. As a result, global auto production growth decelerated to 2.2% in 2018 from 4.9% in 2017. In 2019, global auto production will continue to decelerate to 1% growth with stabilisation expected in 2020,” it said.
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