Worldsteel Forecasts Global Steel Demand Will Contract Again in 2016

By Alex MacDonald

LONDON--Global steel demand is forecast to contract for a second consecutive year in 2016 before recovering the following year. China, the world's largest steel consumer, will continue to weigh on global demand, shrinking in both years as it struggles to boost economic growth, figures from the World Steel Association showed Wednesday.

Global steel demand is forecast to shrink 0.8% to 1,488 million tons this year before rising 0.4% to 1,494 million tons next year, aided by a recovery in steel demand from the European Union and countries that make up the North America Free Trade Agreement region. Last year, global steel demand fell 3%.

"The economic environment facing the steel industry continues to be challenging with China's slowdown impacting [steel customers] globally," said Narendran, Chairman of the Worldsteel Economics Committee.

The short range forecast was provided by the World Steel Association, which represents steelmakers, including ArcelorMittal (MT), that account for about 85% of the world's steel supply.

China, the world's largest steel consumer, is forecast to report a 4% drop in steel demand this year and 3% next year while its share of global steel demand is forecast to drop to 42% from 45% in 2015.

Steel demand outside China will continue to grow by 1.8% in 2016 and accelerate to 3% in 2017.

-Write to Alex MacDonald at [e-mail]

(END) Dow Jones Newswires

April 13, 2016 08:28 ET (12:28 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.