Celsa Group's export director Alexander Gordienko painted a grim outlook for the steel industry at the Irepas conference in Berlin on Monday. Gordienko stated that 2023 was a tough year for steel producers, but 2024 will be even more challenging.

Gordienko does not expect demand to recover until 2025. He forecasts that Chinese steel exports in 2024 will reach record levels last seen in 2015. The Chinese government has started investigating potential fraud in non-VAT exports, which Gordienko believes will only temporarily slow down exports. He thinks China will find a way to continue shipping steel abroad, as exports are a major driver of Chinese growth given the country's weak domestic market and struggling real estate sector.

Despite volatile raw material prices and demand, Gordienko pointed out that steel prices have remained mostly stable recently, as capacity utilization rates are low. European GDP growth is expected to rebound from very low levels, but large European economies are underperforming, while Greece and Spain are performing better than expected.

Emerging markets are performing better, benefiting from the tensions between the US and China, Gordienko observed. However, global long steel consumption recorded a 5.3% decline in 2023, and Gordienko expects a further 0.5% decline in 2024, which would mean another 12 million tonnes lost year-on-year. Wire rod consumption, which saw the steepest decline in 2023, is expected to fall by 8 million tonnes in 2024.

Ulrich Leuchtmann from Commerzbank advised steel producers to be cautious with their investments amid low demand and a high inflation rate environment.