Going by the 4.8 per cent increase in global steel production in January 2021, it would appear that the demand for steel is increasing all over, indicating a recovery in economy. The COVID 19 pandemic broke the back of many industries globally, large or small, apart from taking away the lives of more than 2.5 million and throwing out a few more millions out of their job and occupation.
Globally, the steel market after the end of Lunar holiday period in China is looking up. The stimulus measures by the governments appear to be the prime mover. The EU is in the midst of implementing $2.19-trillion recovery plan to lend support to the region as well as decarbonisation efforts of steel industry. An investment of $1.9 billion is planned on 55 rail infrastructure projects.
A good volume of idle capacities in EU is coming back to action to serve the pick-up of demand in post-COVID market. There is a lot of discussion among member countries in EU on continuation of safeguard measures on steel imports.
Hopefully, the Chinese domestic demand from February onwards is likely to rise on the back of higher construction activity in housing and commercial areas. The stimulus measures by the Chinese government on infrastructure are continuing in railways, bridges, roads, flyovers coastal waterways and infra segments.
Chinese investment in developing infra in ASEAN markets is also helping to boost steel demand in these group of countries. The Philippines has announced a massive $ 20.8 billion for public infrastructure. Indonesia is another country receiving Chinese investment in metal sector. In the US, the president has approved $1.9-trillion investment primarily for infra sector.
Steel producers in the US, however, are largely in favour of continuation of 25% duty on steel imports under Section 232 of US Trade Act.