Worldsteel expects higher steel demand in 2021-22, recovery in steel-using sectors

Thursday, 15 April 2021 17:51:20 (GMT+3)   |   Istanbul

The World Steel Association (worldsteel) has released its Short Range Outlook for 2021 and 2022, forecasting that steel demand will increase by 5.8 percent in 2021 to reach 1.87 billion mt, after decreasing by 0.2 percent in 2020. In 2022, steel demand is forecast to rise by 2.7 percent, totaling 1.92 billion mt.

The forecast assumes that the ongoing second or third waves of infections will stabilize in the second quarter and that steady progress on vaccinations will allow a gradual return to normality in major steel-using countries, the worldsteel report noted.

Commenting on the outlook, Saeed Al Remeithi, chairman of the worldsteel economics committee, stated, “Despite the disastrous impact of the pandemic, the global steel industry was fortunate enough to end 2020 with only a minor contraction in steel demand. This was due to a surprisingly robust recovery in China, with growth of 9.1 percent. In the rest of the world, steel demand contracted by 10.0 percent. In the coming years, steel demand will recover firmly, both in the developed and developing economies, supported by pent-up demand and governments’ recovery programs. However, for most developed economies a return to the pre-pandemic levels of steel demand will take a few years.”

In a regional analysis, worldsteel said China’s steel demand is expected to increase by three percent in 2021, and by one percent in 2022, as the government focuses on more sustainable growth. Steel demand in the developing economies excluding China is expected to show a relatively quick rebound in 2021 and 2022 by 10.2 percent and 5.2 percent, respectively. As for Turkey, the recovery momentum that started in late 2019 amid construction activities will continue and steel demand is expected to return to the pre-currency crisis level in 2022. Worldsteel noted that there will be a substantial recovery in 2021 and 2022 in advanced economies, with growth of 8.2 percent and 4.2 percent, respectively. However, steel demand in 2022 will still fall short of 2019 levels.

Regarding the steel-using sectors, the global construction and automotive sectors are expected to return to the 2019 levels in 2022. Worldsteel stated that there will be regional variation to the speed of recovery in the construction sector. In developed economies, green recovery programs and infrastructure renewal will drive construction demand. The automotive sector is expected to recover strongly in 2021, driven by pent-up demand, increased use of personal transportation due to safety concerns. As for the machinery sector, recovery is expected to take place at a faster pace, while uncertainty is still a constraining factor. Investments in digitization, automation and renewable energy sources, and green initiatives will drive growth in the machinery sector.

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