Developed economies are expected to see a steeper fall in finished steel demand than developing economies in 2020, with the latter also seeing a stronger rebound in 2021, according to worldsteel.
Demand in developed economies should slump -14.4% on-year in 2020 to 336.7 million tonnes, despite the strong rebound after post-lockdown reopening. Manufacturing in the developed economies, which was only just beginning to recover from the slowdown in late 2019, has been pushed back again by the pandemic.
In the US, recovery from the lockdown has been strong, aided by substantial government support measures. However, the country is still struggling to control the virus’s spread, and the recovery momentum might taper off in the coming months. Demand there is seen dropping -15.8% to 82.3mt this year.
In the EU, the pandemic impact was softened by strong social security schemes and fiscal stimulus. Despite the stronger-than-expected post-lockdown recovery, deep contraction in major steel using sectors, especially automotive, will weigh on growth. EU28 demand is seen down -15.2% in 2020 to 134.3mt.
Demand in Japan and South Korea is seen down -19.6% and -8.2% respectively this year to 50.8mt and 48.9mt, Kallanish notes.
The developing economies excluding China have been less well equipped to absorb the pandemic shock, and the impact has been uneven across countries. It has included lower domestic demand, the collapse of exports and commodity prices, and a free fall in tourism. Demand in developing economies should fall -12.3% in 2020 to 408.3mt.
India and Brazil have suffered most from a failure to effectively control the virus, worldsteel observes. India is set to register its steepest steel demand decline in decades of -20.2% in 2020 to 81.9mt, with Central and South America demand to fall -10.1% to 37.4mt.
In 2021, demand in the developed economies is seen bouncing back by 7.9% on-year to 363.5mt. However, developing economies demand will rise even faster, by 10.6% to 451.6mt, driven by infrastructure investment. India should see a fast recovery next year, but Latin American recovery will be slow.