Steel demand decline in 2020 to be less than previously forecasted: worldsteel

Worldsteel has reviewed its Short Range Outlook (SRO) for 2020 and 2021 to show a much smaller demand decline than previously expected, as the sector recovers from the impact of the coronavirus pandemic, the association of world steel producers stated Oct. 15.

China’s strong recovery will mitigate the reduction in global steel demand this year while the post-lockdown recovery in steel demand in the rest of the world has been stronger than was earlier expected, but still shows a deep contraction in 2020 with only a partial recovery expected in 2021.

In 2020 worldsteel forecasts that steel demand will contract by 2.4% from last year, dropping to 1,725.1 million mt, rather than by 6.4%, as it forecasted in June. In 2021 steel demand is expected now to recover to 1,795.1 million mt, with an increase of 4.1 % over 2020, while in June the association expected an increase of 3.8% year on year.

The forecast assumes that despite the current resurgence in infections in many parts of the world, nationwide lockdowns will not be repeated. Instead, selective and targeted measures will be able to contain this second wave, the association stated.

China’s steel demand is expected to increase by 8% in 2020, aided by government infrastructure stimulus and a strong property market, but for 2021, steel demand is expected to stay flat on the expectation that the manufacturing sector’s rebound will be limited.

Overall steel demand in the developed economies is expected to fall by 14.9% in 2020 and increase by 7.9% in 2021 and to reach 2019 pre-pandemic levels only in 2022.

During the press briefing worldsteel, as by policy, did not discuss prices, but pointed out that in future steel prices will be increasingly influenced by carbon prices.

Steelmakers are targeting carbon emissions reductions across all regions, using different production routes. The use of more challenging technologies may also allow new steel products to be produced in future, worldsteel general director Edwin Basson underscored.

— Annalisa Villa