New Delhi, Oct 17 (KNN) India’s steel demand is expected to move back to a higher growth track as India recovers from the twin shocks of demonetization and goods and service tax (GST), according to World Steel Association.

In its October 2018 short range outlook, world steel said that India’s steel demand will be supported by improving investment and infrastructure programs. Stressed government finance and corporate debt weighs on the outlook.

It further highlighted that sluggish construction activities and stock adjustments led to slow growth of steel demand in the ASEAN region in 2017 and 2018, but demand in the ASEAN region is expected to resume its growth momentum backed by infrastructure programs in 2019 and onwards.

Risks are largely related to rising trade tensions between the US and China, currency volatilities and political instability.

Steel demand in developing Asia excluding China is expected to increase by 5.9% and 6.8% in 2018 and 2019 respectively, according to world steel.

The global industry body for steel pointed in its report that in the remainder of the emerging and developing economies, the recovery has been slow to gain momentum, with rising uncertainty in both domestic and external environments.

Structural reforms, high financial market vulnerability and possible currency pressures from the tensions in the global economy are amongst the main reasons, it added.

In the Gulf Cooperation Council (GCC) countries, reforms and a stronger oil market have led to an upward momentum in steel demand, but at a slow pace.  The outlook for Iran has turned less favorable due to the reinstatement of sanctions by the US.

Even with the rise in oil prices, growth in steel demand in Russia is expected to show weak momentum.

Sharing the steel demand outlook for other countries as well, worldsteel mentioned that Turkish steel demand is expected to contract in 2018 with the currency crisis it has faced, but the government’s stabilization measures and a consequent return to the competitiveness of the manufacturing sector is expected to help recovery in 2019.

It further mentioned that steel demand in the Latin American economies is continuing its second year of recovery backed by positive developments in the domestic and the global economy. Steel demand in Brazil continued its stable recovery in 2018. This will continue into 2019 as election fever subsides. Steel demand in Mexico has suffered from uncertainties related to the NAFTA negotiation and the election, but the recent signing of USMCA and the new President calming jittery markets are expected to help the economy to recover slowly in 2019.

Steel demand in the emerging economies excluding China is expected to grow 3.2% and 3.9% in 2018 and 2019 respectively.