At the 15th SteelOrbis "New Horizons in Steel Markets" annual conference being held virtually on December 1-3 due to the Covid-19 pandemic, Kazuo Mike Fujisawa, head of the overseas business planning department at Japan’s JFE Steel Corporation, stated that all world economies have been impacted by the Covid-19 pandemic, while China has been the first country to recover and South Korea, Japan and the Middle East are still trying to ease the effects of the pandemic.
Mr. Fujisawa stated that the global market is now driven by megatrends, which include technological improvements, steps taken towards carbon-free production, geopolitical tendencies and demographic changes that impact economies. Stating that the pandemic has also changed these trends, he added that supply chains have been more focused on domestic markets.
Looking at the different countries, Mr. Fujisawa said that China’s GDP decreased by six percent in the first quarter this year and then increased by 3.2 percent and 4.9 percent in the second and third quarters, respectively. In particular, industrial production and the automotive sector in China recorded significant recoveries, while China’s exports also increased. According to the JFE Steel official, for the current year and 2021, China’s steel consumption is expected to be near 980 million mt.
In South Korea, GDP declined by 12 percent in the second quarter, though it increased by 7.9 percent in the third quarter. Mr. Fujisawa said that the South Korean automotive industry has returned to pre-Covid levels. As for steel consumption, this year steel demand in the country is expected to reach 48.9 million mt, while 50 million mt of consumption is foreseen for 2021.
As for Japan, GDP has shown some recovery though it is still far from pre-Covid levels. In 2020, steel demand in the country is expected to decline by 19.6 percent to near 50 million mt, while it is expected to increase to 54.9 million mt in 2021.
Fujisawa stated that, with new production lines to come into operation in the ASEAN region, there will be a further 61.5 million mt of capacity added to the global market.
Answering a question regarding the possibility of China lifting its ban on scrap imports, Fujisawa said that blast furnaces account for 90 percent of Chinese steel production, while 10 percent is produced in electric arc furnaces, while he went on to say that Chinese production is shifting to electric arc furnaces as a result of environmental policies in the country, though adding that he does not expect a drastic change in scrap imports soon.