The global steel demand will increase by 1.3 per cent to 1,535.2 million tonnes this year on account of recovery in developed countries and accelerating growth momentum in emerging economies, global industry body Worldsteel said today.
Further, the international demand, which grew 1 per cent in 2016, will rise by 0.9 per cent to 1,548.5 MT, according to the WSA, which released its Short Range Outlook (SRO) for 2017 and 2018, according to World Steel Association (Worldsteel).
Commenting on the outlook, Worldsteel Economics Committee Chairman T V Narendran said that in 2016, the steel demand recovery was stronger than expected with the upside mostly coming from China.
"We believe in 2017 and 2018, we will see a cyclical upturn in steel demand with a continuing recovery in the developed economies and an accelerating growth momentum in the emerging and developing economies," Narendran said.
"We expect that Russia and Brazil will finally move out of their recessions. However, China, which accounts for 45 per cent of global steel demand, is expected to return to a more subdued growth rate after its recent short uplift. For this reason, overall growth momentum will remain modest," Narendran said.
After the demonetisation shock, the Indian economy is expected to resume growth, although on a slightly weakened basis. The ASEAN countries are expected to demonstrate solid growth in 2017-18.
"However, the region remains vulnerable to currency volatilities associated with US interest rate hikes and dollar appreciation," the industry body said.
The steel demand in the emerging and developing economies excluding China, which accounts for 30 per cent of world total, is expected to grow by 4 per cent in 2017 and then 4.9 per cent in 2018.
With the risk of global recession receding and economic performance improving across most regions, a number of geopolitical changes still create some concerns.
US policy uncertainties, Brexit, the rising populist wave in current European elections and the potential retreat from globalisation and free trade under the pressure of rising nationalism adds a new dimension of uncertainty in investment environments, Worldsteel said.
"To balance this, risks from ongoing conflicts in the Middle East and in Eastern Ukraine appear to be reducing," it added.
Having dealt with the structural problems and fall in commodity prices, the Russian and Brazilian economies are stabilising and expected to show modest growth in 2017.
Russian growth will continue to pick up in 2018 as structural reforms take more effect.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)