Global steel industry
Previously, we discussed that the WSA (World Steel Association) forecast that global steel demand would increase by 0.5% this year. However, Chinese steel consumption is expected to decline by 0.5% in 2015. Several analysts believe that Chinese steel consumption has peaked out.
Chinese steel consumption grew at a CAGR (compound annual growth rate) of 17% between 2000 and 2008. Today, the per capita steel consumption in China is more than double the global average. It’s almost 50% more than the per capita consumption in the US (IVV).
India steel demand
Edwin Basson, the Director General of WSA, expects steel demand to increase to 2,000 million tonnes in 2030—up 25% from 1,600 million tonnes in 2014. Global steel consumption doubled from 800 million tonnes in 2004 to 1,600 million tonnes in 2014—largely driven by demand from China. According to Basson, “China has reached the upper end of the growth curve, and is seeing a real slowdown.”
He also rules out another phase of high growth for steel consumption like the one that was led by China. However, he expects another 400 million tonnes of steel demand—led largely by India (EPI). India’s per capita steel consumption is still below the global average. This can be seen in the above chart. India’s steel demand is expected to increase as the country takes strides towards development. The new government is also taking a lot of initiatives to boost investors’ confidence.
In the next part of this series, we’ll discuss the WSA’s outlook for European steel demand.