Economic Woes Crimp Steel Demand

　　A worker handles steel wire in Haikou, Hainan province. Emerging and developing economies, excluding China, are expected to see a 1.7 percent increase in demand for steel this year. SHI YAN/CHINA DAILY

　　Global demand for steel will grow by just 2 percent this year owing to arebalancing of the Chinese economy and a slowdown in other emerging countries,the sector's trade body said on Monday.

　　The growth forecast to 1.56 billion metric tons in steel use by the WorldSteel Association is down from the 3.1 percent rate it forecast in April andthe 3.8 percent recorded in 2013.

　　"The positive momentum in global steel demand seen in the second halfof 2013 abated in 2014 with weaker than expected performance in the emergingand developing economies," the head of the association's economicscommittee, Hans Juergen Kerhoff, said in a statement.

　　"The slowdown in China's steel demand reflecting the structuraltransformation of the economy has contributed significantly to our lower globalgrowth projection," he said.

　　The WSA now expects just 1 percent growth in China's steel use this yearto 748.3 million tons, and 0.8 percent growth in 2015.

　　"In China rebalancing (of the economy) will continue to act as a dragon steel demand," said Kerhoff.

　　Falling commodity prices, structural constraints and geopolitical tensionsalso led to a "major slowdown" in South America and the Commonwealthof Independent States countries.

　　The WSA now expects recoveries in the EuropeanUnion, United States and Japan to be stronger, but not enough to compensate forthe slowdown in emerging economies.

　　A drop of 0.4 percent in US steel use last year is being followed by anupwardly revised 6.7 percent jump this year thanks to strong growth in theautomotive and energy sectors, said the WSA.

　　After growing by 2.1 percent last year, demand growth is expected toaccelerate to 2.3 percent this year in Japan to 66.8 million tons.

　　In the EU,demand growth is expected to jump from 0.8 percent last year to 4 percent thisyear to 145.9 million tons, then slow to 2.9 percent in 2015.

　　The WSA now expects steel use to rise by 4 percent in developed countriesthis year, then slow to 1.7 percent growth in 2015.

　　Emerging and developing economies, excluding China, are expected to see a1.7 percent increase in demand this year, which will then pick up to 4.7percent in 2015.