KEY POINTS
- China’s share of global steel demand is set to drop below half in 2024.
- Other regions like India and Latin America are seeing strong growth in steel demand.
- Chinese exports are rising due to increased demand outside of the country.
For the first time in six years, China’s real estate industry is facing serious difficulties as the country’s steel demand is expected to make up less than half of world consumption in 2024, according to the World Steel Association.
This change demonstrates how the demand for steel is changing globally, with growth accelerating in areas like South Asia, the Middle East, and Latin America.
A decline in China’s steel consumption
For decades, China drove global steel demand, but the country’s decline in real estate and infrastructure investments has led to a continued drop in steel consumption.
The World Steel Association projects Chinese demand to fall for the fourth consecutive year to 869 million tons in 2024, while the rest of the world will see a 1.2 percent increase, reaching 882 million tons.
This is the first time since 2018 that global demand outside of China has surpassed China’s share.
Simon Trott, Chief Executive for Iron Ore at Rio Tinto, emphasized this shift, stating, “China’s at the structural peak in terms of steel demand.” He noted that the world will still require more steel in the coming decades, but growth will be driven outside of China.
Global steel demand on the rise
While China’s steel demand slows, other countries are experiencing growth in their markets. India, for instance, is projected to see an 8 percent increase in steel demand in 2024 after a 14 percent rise in 2023, reaching 143 million tons.
According to Mining.com, other developing economies, particularly in the Middle East and Latin America, are also experiencing steady growth, with a 7 percent increase in demand for the second year running.
This shift reflects the end of China’s infrastructure and property boom, which had long driven the nation’s steel needs. However, the rise in demand from emerging markets has also led to a surge in Chinese steel exports, reaching their highest levels since 2016.
Future risks and outlook
The World Steel Association pointed out that if the government’s stimulus plans are successful, Chinese steel demand could rise again despite the current negative trend.
Demand in 2025 may be impacted by the “growing possibility of more substantial government intervention,” which is still present.
The industry’s environment is shifting as a result of this disparity in the world’s steel consumption, with more prospects emerging outside of China.
The focus will move from the long-dominant Chinese market to emerging economies as the globe enters a new phase of steel consumption.
