The World Steel Association (Worldsteel) recently released an outlook report, which presents a mixed bag for global steel demand.

Demand in China will continue to contract but at a slower rate than in 2015, when a five-percent decrease was seen. Steel demand in developed economies is projected to increase by 0.2 percent in 2016 and by 1.1 percent in 2017.

The best news comes from emerging and developing economies, excluding China, where steel demand is expected to expand by 2.0 percent in 2016 and 4.0 percent in 2017.

Put it all together and Worldsteel projects a global increase of 0.2 percent for 2016 and of 0.5 percent in 2017. It’s a modest increase, but it follows a contraction of 3.0 percent globally in 2015.

Weakness in investments globally are holding back a stronger steel demand recovery, according to the Worldsteel report. The report expects the slight growth momentum now seen to remain weak for the time being due to the continued rebalancing in China and weak recovery in the developed economies.

Political factors, such as the Brexit vote earlier this year in the United Kingdom, also play into the uncertainty that clouds the investments picture. “The UK referendum outcome has further raised uncertainty on the long-awaited recovery of investment in the EU,” said T.V. Narendran, Chairman of the Worldsteel Economics Committee.

Chinese GDP growth in 2016 will be at its lowest level since 1990, but the decline in the demand for steel will be less severe than reflected in the Worldsteel April 2016 forecast. The Chinese government has issued a number of small stimulus measures, boosting infrastructure spending and real estate market and auto sales. “However, the rebound in the real estate market is limited,” said the report, “and the manufacturing sectors have only limited room for recovery.” Worldsteel projects steel demand in China to decline by -1.0 percent in 2016 and by -2.0 percent in 2017.

Emerging economies hit by low commodity prices are showing signs of stabilization and Worldsteel foresees high growth in India and the ASEAN to continue. Steel demand in Brazil is seen to start a moderate recovery in 2017 and a rebound in oil prices will help to stabilize the decline in Russia.

In the developed world, steel demand continues to recover in the EU thanks to a mild recovery. The UK’s steel demand for 2016 and 2017 is expected to go down and the future looks murky.

Steel demand in the United States is struggling to grow due to the strong dollar, which hurts manufacturing exports, and the collapse in investments related to the shale oil industry. Japan’s steel demand growth is subdued due to structural issues and is negatively affected by the appreciation of the yen over the last few months.