During his presentation at the SteelOrbis 2021 Spring Conference & 84th IREPAS Meeting held virtually on March 15 with almost 1,000 participants, Alexander Gordienko, international sales manager of Spain’s CELSA Group, stated that the global economy outperformed expectations in 2020 and contracted only by 3.5 percent year on year, reflecting stronger-than-expected momentum in the second half of the year. In 2020, advanced economies contracted by 4.9 percent, while emerging markets contracted only by 2.4 percent, both year on year. According to CELSA, as for this year, advanced economies are expected to grow by 4.3 percent and emerging/developing economies will grow by 6.3 percent. According to Mr. Gordienko, the strength of the recovery is projected to vary significantly across countries, depending on access to medical interventions, effectiveness of policy support, exposure to cross-country spillovers, and structural characteristics entering the crisis. He said that a V-shaped recovery is expected everywhere, but affirmed that all will depend on government policies.
Mr. Gordienko stated that the European construction sector took a big hit in 2020, with the worst performing countries being the UK and France. However, the sector is expected to return to pre-Covid levels by the end of 2021.
As for the global steel sector, the CELSA official said that in 2020 global steel output decreased by only one percent, but excluding China it decreased by eight percent. In terms of global steel demand, he noted, “China has led the world in absorbing a lot of steel from Chinese mills but also from other mills. Thanks to China, we have not seen the huge slump that was actually expected for 2020.” He added that world steel demand is expected to increase from 2020’s 1.65 million metric tons to 1.72 million metric tons in 2021, which is still three percent less than in 2019.
Mr. Gordienko stated that China was a net importer of steel during four months last year from June to September inclusive, and that the Chinese government’s big infrastructure programs have really supported the global market. He said that, with China taking environmental measures including closing and replacing blast furnaces with EAFs, it will be less dependent on iron ore and will become more dependent on scrap.
As for long products, the CELSA official stated that consumption of all products increased by 0.7 percent year on year in 2020. Production of wire rod and merchant bars increased by two percent and 3.2 percent respectively, while production of steel sections decreased by 3.2 percent and output of rebar declined by 0.6 percent. Rebar consumption decreased by 0.6 percent year on year in 2020, mainly in the third world countries affected by the pandemic. Still, China increased its share of global long steel production to 61.2 percent, he noted.
Answering a question about regional differences in steel demand in the global market, Gordienko said, “The majority of consumption of long products is in Asia now and this will not change, it will continue. Where we see growth in imported steel, I think we need to look at the US. They are discussing bigger construction spending. We are talking about huge numbers. If this goes through, if even part of it goes through, we may see a new super-cycle of infrastructure commodities.”