Global demand for steel will grow by just 2.0 per cent this year owing to a rebalancing of the Chinese economy and a slowdown in other emerging countries, the sector's trade body says.
The growth forecast to 1,562 million tonnes in steel use by the World Steel Association is down from the 3.1 per cent rate it forecast in April and the 3.8 per cent recorded in 2013.
"The positive momentum in global steel demand seen in the second half of 2013 abated in 2014 with weaker than expected performance in the emerging and developing economies," the head of the association's economics committee, Hans Juergen Kerhoff, said in a statement.
"The slowdown in China's steel demand reflecting the structural transformation of the economy has contributed significantly to our lower global growth projection," he added.
The WSA now expects just 1.0 per cent growth in China's steel use this year to 748.3 million tonnes, and 0.8 per cent growth in 2015.
"In China rebalancing (of the economy) will continue to act as a drag on steel demand," said Kerhoff.
Falling commodity prices, structural constraints and geopolitical tensions also let to a "major slowdown" in South America and the CIS countries.
The WSA now expects recoveries in the EU, United States and Japan to be stronger, but not enough to compensate for the slowdown in emerging economies.
A drop of 0.4 per cent in US steel use last year is being followed by an upwardly revised 6.7 per cent jump this year thanks to strong growth in the automotive and energy sectors, said the WSA.
Growth is expected to continue at a rate of 1.9 per cent last year.
After growing by 2.1 per cent last year, demand growth is expected to accelerate to 2.3 per cent this year in Japan to 66.8 million tonnes.
In the EU, demand growth is expected to jump from 0.8 per cent last year to 4 per cent this year to 145.9 million tonnes, then slow to 2.9 per cent in 2015.
The WSA now expects steel use to rise 4 per cent in developed countries this year, then slow to 1.7 per cent growth in 2015.
Emerging and developing economies, excluding China, are expected to see a 1.7 per cent increase in demand this year which will then pick up to 4.7 per cent in 2015.