Global steel demand to fall -6.4% this year: worldsteel

Steel Demand Forecast – June 2020
(million tonnes)201920202021
EU 28158,1133,1147
Other Europe33,833,336,5
Central/South America42,435,139,3
Middle East48,740,245,4
Asia and Oceania1253,31218,61243,2
Worldsteel forecast

The World Steel Association has issued its outlook for steel apparent demand, indicating that this year global demand will fall by -6.4% y-o-y, before recovering 3.8% y-o-y in 2021, Kallanish reports.

The outlook was postponed by the association due to the uncertainties created by the Covid-19 outbreak. “The COVID-19 crisis, with its disastrous consequences for public health, also represents an enormous crisis for the world economy. Our customers have been hit by a general freeze in consumption, by shutdowns and by disrupted supply chains. We therefore expect steel demand to decline significantly in most countries, especially during the second quarter. With the easing of restrictions that started in May, we expect the situation to gradually improve, but the recovery path will be slow,” worldsteel said.

The fall expected for this year is in line with the one registered in the 2008-2009 financial crisis, nevertheless Edwin Basson, director general of worldsteel, noted that this time around steel demand is expected to fall less compared with the dramatic fall projected for global GDP.

While most of the global steel using countries will be strongly impacted by the fall, China is expected to see its steel demand growing 1% y-o-y. Together with Turkey and Vietnam, China is the sole country expected to increase steel use this year among the top 10 users globally. India, meanwhile, the second largest steel user globally, will see its demand falling by -18% y-o-y.

Edwin Basson added that the one presented currently is the most realistic scenario. Worldsteel has also prepared a worst case scenario, which indicated a more dramatic demand fall.  “One key uncertainty remains the possibility of second and third waves of virus outbreak and how these will impact the economy depending on countries’ approaches,” Basson explains.

While worldsteel expects a swift recovery of 3.8% y-o-y for steel demand in 2021, taking volumes back to above 1.7 billion tonnes, it is likely that 2019 demand levels will not be fully recovered until 2022.