Commodity Market Report

Global steel long-term outlook Q3 2019

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What’s the key takeaway from our latest quarterly steel report?

The steel industry has witnessed a dramatic and negative turnaround over the past year. Twelve months ago, the industry was hot – steelmaker margins were at pre-GFC levels and there were billions of dollars of proposed capacity investment.

But fast forward to today and the global weighted HRC price has dropped 15% and raw material prices have soared, creating an environment of rising costs and falling prices.

Read our report to understand:

  • What's behind the changing dynamics in the steel market
  • Our forecasts for steel prices in China and India out to 2040
  • What we expect for Chinese steel production in the long term
  • Can India’s steel market be revived, after a weak 2019?

You’ll get access to our datasets and charts, quantifying changes in supply, demand, production, pricing and more, for every major region. Scroll down for the full table of contents.

27 September 2019

Global steel long-term outlook Q3 2019

Report summary

In the next few years, steelmakers globally are in for a tough ride. With global steel demand growth weak and cost pressures subsiding, we do not expect steel prices to recover substantially any time soon. Major changes to our outlook in this update include a downward revision to Chinese long term steel production, upward revisions to Indonesian and Vietnamese steel demand, and the inclusion of price forecasts for Indian HRC, Turkish scrap, and Russian pig iron and DRI.

Table of contents

    • Demand
    • Chinese steel demand is about to flat-line
    • Short term: stable growth
    • Medium term: structural changes
    • Long term: ageing population
    • What’s changed in our models?
    • The steel demand previously met by induction furnace now is met by regular BOFs or EAFs production
    • Infrastructure steel demand
    • Infrastructure steel demand remodelled
    • Downgraded steel demand growth from infrastructure
    • Property steel demand
    • Manufacturing steel demand
    • Short-term manufacturing steel demand depends on government stimulus
    • Auto steel demand: more room to grow, but not now
    • Steel indirect exports
    • Supply
    • Capacity: supply-side reform has run its course
    • Capacity swap projects favour EAF technology
    • Steel exports
    • Crude steel production forecast change
  • Japan
  • South Korea
  • Taiwan
  • Malaysia
  • Indonesia
  • Vietnam
  • Philippines
  • Thailand
    • Indian short-term growth trending downward
    • but the Indian Government is taking steps to revive it
    • The automotive sector facing short-term obstacles
    • Infrastructure investment to drive steel demand directly and indirectly
    • Real estate and construction
    • Steel production facing short-term pressures, but long-term fundamentals still intact
    • EU28
    • Growth in the EU automotive sector cannot continue indefinitely
    • The outlook for the construction sector is weakening
    • Capacity expansions are small
    • Hot metal outlook
    • The future of European iron making depends on new technologies
    • Iran
    • Saudi Arabia
    • Egypt
    • Algeria
    • DRI
    • Near term
    • Medium term
    • Long term
    • Construction
    • Automotive, household appliances and machinery
    • Production
    • Demand – stumbles in 2019 but growth to follow
    • Production
    • American steel (was) great again
    • Automotive: demand contraction is (almost) inevitable
    • Construction: hopes still with commercial construction and infrastructure
    • Automotive steel demand is under pressure
    • Steel production will not recover in Canada
    • Mexican steel production will bounce back
    • Steel demand is under pressure
    • Steel production will outpace demand
    • Demand outlook is weak
    • Production outlook is reliant on exports
    • Ukraine is losing some of its competitiveness
    • Near to medium term
    • Long term
    • Hot metal versus scrap costs
    • India and China cost convergence
    • Energy transition and carbon abatement
    • What a difference a year makes
    • What is the impact of trade restrictions?
    • European margins under pressure from rising CO 2 costs
    • Indian price premia will continue to disappear

Tables and charts

This report includes 33 images and tables including:

  • Steel intensity curve
  • China's demand change waterfall
  • Improvements to the China model
  • Chinese crude steel production
  • Infrastructure steel demand
  • Property demand forecast change
  • China's marriageable population
  • China's infrastructure demand change waterfall
  • China's indirect exports
  • China's crude steel production forecast
  • China's steelmaking capacity change
  • India automotive growth
  • Automotive steel demand growth
  • Type of infrastructure projects
  • Estimated value of infrastructure projects
  • Production and demand forecast change
  • Share of crude steel production by route
  • EU28 domestic demand growth potential is limited
  • EU hot metal production will be in permanent decline from the early 2020s
  • As trade recovers from 2020, crude steel production will expand at stronger rates.
  • Brazilian steel demand by sector.
  • We think 2019’s potential dip in demand is a blip and growth will continue from 2020.
  • The medium term outlook is positive for South American crude steel production
  • Demand index of major steel consuming sectors
  • Construction spending index
  • Steelmaking raw materials prices
  • Scrap prices
  • Scrap and metallics prices in real 2019 US$ terms
  • Steel prices have fallen despite rising iron ore prices
  • The US price fall has been the sharpest
  • Long term Indian and Chinese HRC prices to converge
  • Rebar price to preserve stronger regional premia
  • Steel prices in real 2019 US$ terms

What's included

This report contains:

  • Document

    Global steel long-term outlook Q3 2019.xls

    XLS 3.66 MB

  • Document

    Global steel long-term outlook Q3 2019

    PDF 1.14 MB

  • Document

    Global steel long-term outlook Q3 2019

    ZIP 1.98 MB

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