The World Steel Association (worldsteel) has forecast that steel demand will grow by 4.5% in 2021 and reach 1,855.4 million tronnes after 0.1% growth in 2020. In 2022, steel demand will see a further increase of 2.2% to 1,896.4 million tronnes. The current forecast assumes that, with the progress of vaccinations across the world, the spread of variants of the COVID virus will be less damaging and disruptive than seen in previous waves.
Commenting on the outlook, Mr Al Remeithi, Chairman of the worldsteel Economics Committee, said, “2021 has seen a stronger than expected recovery in steel demand, leading to upward revisions in our forecast across the board except for China. Due to this vigorous recovery, global steel demand outside China is expected to return earlier than expected to its pre-pandemic level this year.
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.
While the manufacturing sector’s recovery remained more resilient to the new waves of infection than expected, supply-side constraints led to a levelling off of the recovery in the second half of the year and are preventing a stronger recovery in 2021. But with high backlog orders combined with a rebuilding of inventories and further progress in vaccinations in developing countries, we expect steel demand will continue to recover in 2022.
Persistent rising inflation, continued slow vaccination progress in developing countries and further growth deceleration in China all pose risks to this forecast.” While on track to a healthy recovery from the strict lockdown in 2020, India’s economy got another shock from a more severe second wave in April-June, 2021, which caused output across all sectors to fall. However, the economic impact of the second wave was much less severe compared with the first wave, due to more localised lockdowns. Since July, a healthy recovery has resumed for all sectors. As a result, India’s steel demand suffered only a minor downward revision and will show a strong recovery in 2021. India’s steel demand will reclaim the 100 million tonnes mark this year.