Steel demand in developed economies will be affected by deteriorating trade environment in 2019-2020

After a strong 3.1% growth in 2017, steel demand in developed economies grew by 1.8% in 2018. Influenced by the deteriorating trade environment, steel demand growth is expected to slow to 0.3% and 0.7% in 2019 and 2020, respectively.

From 2017 to 2018, under the fiscal stimulus measures introduced by the U.S. government, the strong growth of the U.S. economy, high business confidence and strong employment have benefited the demand for steel in the United States. With the gradual weakening of fiscal stimulus and the normalization of monetary policy, the growth rate of the U.S. economy is expected to slow down in 2019. Growth in construction and manufacturing is expected to slow. Investment in oil and gas exploration is also expected to slow down and infrastructure spending is not expected to increase.

The EU economy is facing the risks brought by the deteriorating trade environment and the uncertainty of Britain's withdrawal from Europe. It is predicted that the growth of steel demand in major EU economies, especially those with high export dependence, will slow down in 2019. Steel demand growth is expected to improve in 2020, depending on easing trade tensions.

In 2018, Japan's steel demand increased, mainly due to the favorable investment environment, the continued activity of the construction industry and the increase of consumer spending before the increase of consumption tax. In 2019 and 2020, despite the support of public projects, steel demand may decline slightly due to a double slowdown in construction and export growth.

Since 2017, South Korea's steel demand has continued to shrink due to weakening demand in the two major steel industries, shipbuilding and automobile. Due to the upgrading of real estate market regulation and the deterioration of export environment, steel demand is expected to continue to decline in 2019, and a moderate recovery is expected in 2020.