A strong V-shaped recovery is expected in the global economy in 2021, following the shrinkage seen in 2020 due to the COVID-19 pandemic, which is expected to support steel demand and prices, Alexander Gordienko, international sales manager of Celsa Group said at the Irepas conference on March 15.
“The global economy has outperformed the expectations in 2020 and contracted only by 3.5%, reflecting stronger-than-expected momentum in the second half of 2020. Advanced economies suffered the most with 4.9% decrease, while emerging markets performed better with reduction in GDP OF 2.4%,” the manager said.
Economies are expected to show a strong V-shaped recovery this year, depending on access to vaccines and government policies and stimulus packages, Gordienko said, adding that in line with the expected V-shaped recovery in global economies, world steel demand is also expected to grow notably in 2021.
As for long products, the sales manager said despite the decline expectations for long products consumption in 2020 amid the pandemic, overall global longs consumption reached 905 million mt, increasing by 0.7% on year.
“Wire rod and merchant bars consumption increased by 2% and 3.2% on year, respectively, while consumption of sections and rebar decreased by 3.2% and 0.6% on year, respectively,” Gordienko noted.
The recovery seen in the global demand as of the second half of 2020, pushed all steel prices up, with no current signs of going down, the manager said, adding that especially wire rod prices reached historically high levels.
“Mills have recuperated the spreads from the historical lows of 2020. Will they manage to hold to the increases? Will fiscal support create a new super-cycle in commodities? These kind of questions and some uncertainties like the success of vaccination and US infrastructure spending will determine the market direction in 2021, the international sales manager said.
— Cenk Can