Developing economy demand to recover strongly: worldsteel

Developing economies, excluding China, suffered more from the Covid-19 pandemic in 2020, but steel demand is expected to show a relatively quick rebound in 2021 and 2022, worldsteel says in its April short-range outlook (SRO).

Finished steel demand in developing economies will increase 10.2% on-year in 2021 to 478.2 million tonnes, following a 7.8% decline in 2020 to 433.8mt, the association says. “India, the Middle East and North Africa, and most Latin American countries suffered the most with inadequate medical capacity, a collapse in tourism, commodity prices, and insufficient fiscal support,” it explains.

However, benefitting from the global economic recovery and with renewed government infrastructure initiatives, steel demand in developing economies is expected to rebound in 2021 and then by a further 5.2% next year.

India’s steel demand will also increase this year to 106mt, up by 19.8% on-year, after it fell 13.7% to 88.5mt in 2020. The growth-oriented government agenda will drive India’s steel demand up, while private investment will take longer to recover, the association observes.

Steel demand in Russia is expected to be more in 2021 by 3% on-year to 43.8mt, following last year’s decline by 2.3% to 42.5mt. The country suffered less than other regions thanks to government measures that supported construction activities. “Russian companies are more oriented to the domestic market for now, but we expect that will change in the foreseeable future and export volumes will increase,” worldsteel director general Edwin Basson told Kallanish during the SRO presentation on Thursday.

In the MENA region, steel demand suffered from the cancellation of construction projects and a fall in oil prices, but the rebound of oil prices helped demand to recover towards the end of 2020. MENA demand this year will be 66mt, up by 6.1% on-year, after the decline by 9.5% in 2020 to 62.2mt. It is expected to recover with the resumption of infrastructure investments.

Latin American economies were severely hit by the pandemic, but in 2021 steel demand will reach 42.7mt, up 10.6% on-year, following the 7.9% decline to 38.6mt in 2020. Mexico’s steel demand was hard hit by reduced auto production and investment. However, the fast recovery in the automotive sector and a strong US economy will increase steel demand in 2021 by 7.5% to 23.4mt, after it was down 11.8% in 2020 to 21.7mt, worldsteel observes.

Svetoslav Abrossimov Bulgaria