The World Steel Association recently cut its forecast for 2016 global steel consumption, but expects to see a return to growth in 2017, a report said.

The finished steel consumption this year is likely to reach 1,488 million metric tonnes (mt), a fall of 0.8 per cent from 2015, on top of last year’s 3 per cent drop from 2014. But in 2017 the association thinks demand will edge up by 0.4 per cent to 1,494 million mt, Edwin Basson, director general at World Steel was quoted as saying in a Platts report.

This year’s expectation of 1,488 million mt is sharply lower than the 1,523 million mt which the association forecast in its previous demand outlook last October. Basson said that the decline in demand in 2016 will be mainly due to falls in China, Brazil and Russia, said the report.

China’s consumption is forecast to decline by 4 per cent from 2015 to 645 million mt in 2016, and by a further 3 per cent to 626 million mt in 2017. Basson said the association is optimistic about the success of China’s efforts to rebalance its economy but a recovery in the construction sector is not expected in the near future.

The biggest growth in consumption in 2016 is expected to be in India, the world’s third largest steel-using country. The association expects Indian demand to rise by 5.4 per cent both this year and next, taking it to 88 million mt in 2017.

Africa and the Middle East are also raising their steel usage, with expected year-on-year growth rates of 3.8 per cent and 2.4 per cent in 2016. In both regions growth should accelerate further in 2017 as the commodity cycle turns up.

In developed economies such as North America and Europe, the association expects recovery momentum to be maintained, with their collective steel demand growing by 1.7 per cent in 2016 and 1.1 per cent in 2017, added the report.