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Commodity Market Report 29 March 2024

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Report summary

Steel will witness another year of uncertainty in 2024 as macro headwinds are still at play. Continued underperformance in the Chinese property market will keep steel demand rangebound, with a downward bias in 2024. Steel demand across the developed world is expected to improve in 2024 from a low base, but we have lowered our growth forecasts for these regions, given the continued impact of monetary tightening on steel-consuming sectors, namely construction. Over the long term, China will remain a laggard. Global growth will be driven by strong demand from emerging economies like India and Southeast Asia. The steel supply mix is in for a revamp as decarbonisation initiatives intensify. The shift to low-carbon steelmaking will elevate the production share of EAF from 28% in 2022 to 49% by 2050.

Uncertainty continues for steel following two years of economic weakness
- Mature economies and India to drive growth in 2024; Chinese demand to remain under pressure as construction continues to decline
Global demand set to rise at CAGR 0.8% through 2050, driven by India and Southeast Asia
Global supply to echo demand, rising at 0.6% CAGR by 2050
Chinese production to fall in 2024; exports to drive production in India
As Chinese supply tails off, India and Southeast Asia to add most capacity
China
- Demand
- Steel demand in 2023 fell 3% year-on-year, dragged down by the sluggish property sector
- Trade
- Supply
- Crude steel production to edge down by 1% in 2024
- H-DRI will ramp up in the long term but BF-BOF will dominate
- Demand
- Steel demand rose by a solid 17% year-on-year in 2023 but will temper down this year
- 1 more item(s)...
Japan
- Steel demand in 2024 to mirror last year. Near-term outlook bearish.
- Long-term prospects remain muted
- Capacity restructuring seems inevitable
- Supply to follow in demand footsteps
South Korea
- South Korean demand to outperform Japan in the near term
- Automobile and shipbuilding to lead in the medium term
- Growth to weaken over the long term
South-East Asia
- Steel consumption stayed flat in 2023; to rebound 5% in 2024
- Long-term prospects remain bullish on solid fundamentals
- Infrastructure to be a key growth determinant
- Housing and automotive production will support consumption
- Rising domestic production to falter finished steel imports
- Rise in BOF output will support hot metal; decarbonisation initiatives to accelerate post-2035
EU and the UK
- Macroeconomic outlook
- A slow path to recovery for European construction
- Switch to electric vehicles to surpass long term auto demand
- EU trade unaffected by Russian sanctions
- EU steel production to gain momentum in 2024, EAF to dominate in the 2030s
- CBAM and ETS to drive up long-term carbon prices
- European long-term production strategies
Turkey
- Monetary pressures continue to dampen post-earthquake reconstruction efforts
- EAF share of production will continue to dominate, reaching 80% by 2050
- Exports to stay restricted amid rising domestic consumption
- Turkey is well positioned to benefit from CBAM
Russia
- DEMAND
- Russian steel demand surged by 10% year-on-year in 2023 despite the ongoing war
- Long term demand to remain stable
- SUPPLY & TRADE
- Sanctions will restrict medium-term production long term production to grow at a CAGR 1%
6 more item(s)...