Steel, one of the most commonly used metals, is used in to manufacture hundreds of objects in our everyday lives such as our homes, appliances, and cars. With such a wide variety of uses steel is a global commodity always in demand. This demand makes for a very profitable industry. Continuing on this trend the steel demand is set to increase over the next several years. What are the causes for this increase in demand and how much will the increase be?
The global steel market relies on a variety of conditions such as the capacity of production, global economies, and the demands coming from the consumers. The year 2016 saw a stronger steel demand than was expecting. A majority of this steel was coming out of China. This trend is expected to continue over the course of the next two years. The year 2017 is expected to have a 1.3% increase in demand. The demand is expected to reach 1.53 billion tons. The following year, 2018, is forecasted to further increase the demand by .9%. This increase translates to roughly 1.55 billion tons of steel production in 2018. But what is causing this increase?
The next two years are expected to see a 2.2% increase in steel demand. Experts believe this increase will occur due to decreases in the amounts of global recessions. This year Russia and Brazil are expected to have an upturn in their economies and climb out of their recessions. These countries alone are expected to increase their steel demand by .7% in 2017 and 1.3% in 2018. China, who produces nearly half the worlds steel is also expected to have an increase in steel demand, although not as much as the previous years. China is expected to increase its steel production by roughly 4% and 4.9% in 2017 and 2018 respectively. China accounts for nearly 30% of the global demand for steel. The construction and building infrastructure industry is responsible for 50% of the worlds steel demand. In less developed countries this industry is booming and is partially the cause for the increase in demand. In more developed nations it is not as big as a role and the demand there is at a standstill. The main driver of this increase however, is the automotive industries. Due to low oil prices, government stimuli, and higher demand for vehicles in developing countries the automotive industry is booming, but it could be reaching its peak. It is due to these varieties of factors and reasons that experts are expecting such an increase in the global steel demand over the next couple years.