Global steel demand in 2021 was expected to increase 4.5%, lower than previously forecast due to China’s economic slowdown, the World Steel Association said Oct. 14 in its Short Range Outlook for 2021 and 2022.
China, which produces more than half the world’s crude steel, was forecast to close 2021 with demand down 1% to 985.1 million mt, compare with a previous outlook of 3% growth.
No growth in steel demand in China was expected in 2022, with the real estate sector remaining depressed in line with the government policy stance on rebalancing and environmental protection.
Meanwhile, steel demand outside China was expected to return to its pre-pandemic level in 2021, earlier than previously forecast thanks to the stronger economic recovery, with worldsteel increasing its reviewed forecast.
The world, excluding China, is expected to grow by 11.5% in 2021 to 870.3 million mt and up by 4.7% in 2022 to 911.3 million mt instead of the previously expected increase of 9.3% in 2021 to 849.1 million mt and rise of 4.7% in 2022 to 889.5 million mt.
“2021 has seen a stronger than expected recovery in steel demand, leading to upward revisions in our forecast across the board except for China,” Al Remeithi, Chairman of the worldsteel Economics Committee, said.
“Strong manufacturing activity bolstered by pent-up demand is the main contributor. The developed economies have outperformed our earlier expectations by a larger margin than the developing economies, reflecting the positive benefit of higher vaccination rates and government support measures. In the emerging economies, especially in Asia, the recovery momentum was interrupted by the resurgence of infections.”
In the developed economies, more targeted and localized lockdowns helped to minimize the impact of the latest infection waves on economic activities in 2021. However, supply chain bottlenecks and the lagging services sector were preventing a more robust recovery.
There was an expectation that by 2022 a reduction in supply chain bottlenecks, continued pent-up demand and rising business and consumer confidence, will strengthen the recovery momentum, the association said.
After falling 12.7% in 2020, steel demand will increase by 12.2% in 2021 and 4.3% in 2022, reaching its pre-pandemic level.
In the developing economies, excluding China, steel continued to recover in 2021, sustained by the recovery in commodity prices and international trade.
However, new COVID-19 waves combined with low vaccination levels and a slow recovery in international tourism restrained developing economies, but for next year, as vaccinations progress, conditions in the developing economies are expected to improve, worldsteel said.
— Annalisa Villa
