Global steel production to grow amid slowing consumption - Fitch

Fitch expects the global steel market surplus to average 700,000 tonnes from 2018 to 2027, compared with an average deficit of 1.9 million tonnes from 2013 to 2017.

Global output growth will remain positive, up 1.9% this year, albeit at a slower pace than output growth from 2016 to 2017.

China will remain the driving force behind global steel production, but India is positioning itself as the site of global steel production growth, and the country's share of global steel production will increase from 6% this year to 8.6% in 2027; production increased from 106 million tonnes this year to 173 million tonnes by 2027.

Manufacturing in the US and Europe will continue this trend. The restorative protection of domestic markets will play a role in this recovery, especially in the US. Overall, this will drive prices down over the next five years, the report said.

Global steel consumption will grow 4.2% this year and 2.2% in 2019, up from 5.1% in 2017. Global consumption is expected to increase from 1.79 billion tonnes this year to 2.01 billion tonnes by 2027.

Slower construction demand growth in China is expected to offset the modest acceleration in advanced economy demand and reduce global market density. The country's consumption will grow by 7.1%, and the infrastructure will continue to be the driving force.

India is not expected to see strong steel consumption in the coming years, increasing by 5.4% on average from 2018 to 2027.

In the meantime, US consumption will accelerate in the coming years due to rising infrastructure spending after a decade of stagnation. Consumption in other major economies, including Japan and South Korea, will remain relatively weak.