China’s role as the engine of the global steel industry is shifting to other emerging economies, but the shift won’t be easy or quick, according to worldsteel economics committee chairman Hans Jürgen Kerkhoff.

At worldsteel conference in Chicago on 12 October, Kerkhoff said the association expects global steel demand will fall this year by -1.7% on-year to 1.513 billion tonnes. Last year, worldsteel forecast global steel growth at 0.7%. The industry will return to that growth rate in 2016, Kallanish understands.

“It is clear that the steel industry has, for the time being, reached the end of a major growth cycle which was based on the rapid economic development of China,” Kerkhoff says. “Combined with China’s slowdown we also face low investment, financial market turbulence and geopolitical conflicts in many developing regions. The steel industry is now experiencing low-growth which will last for the time it takes for other developing regions of sufficient size and strength to produce another major growth cycle.”

Russia and Brazil, in particular, are suffering from a “…severe contraction in steel demand”, says worldsteel in a statement accompanying the conference. Additionally, markets in the Middle East, Africa and Ukraine are facing political instability.

However, emerging market steel demand excluding China is expected to grow by 1.7% this year and 3.8% next year, worldsteel says.