Worldsteel revises steel demand growth forecasts for 2021 and 2022 

Thursday, 14 October 2021 15:43:01 (GMT+3)   |   Istanbul

The World Steel Association (worldsteel) has released an update of its Short Range Outlook for 2021 and 2022, forecasting that steel demand will increase by 4.5 percent in 2021 to reach 1.85 billion mt. In 2022, steel demand is forecast to rise by 2.2 percent, totaling 1.89 billion mt. In the previous forecast, steel demand was expected to increase by 5.8 percent in 2021 to reach 1.87 billion mt, while in 2022 steel demand was forecast to rise by 2.7 percent, totaling 1.92 billion mt.

The worldsteel forecast assumes that, with the progress of vaccinations across the world, the spread of the variant of the coronavirus will be less damaging and disruptive than seen in previous waves.

“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. 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,” Saeed Al Remeithi, chairman of the worldsteel economics committee, stated in his comments on the outlook.

Worldsteel expects steel demand to continue to recover in 2022 with a rebuilding of inventories and further progress in vaccinations in developing countries, though, persistent rising inflation, continued slow vaccination progress in developing countries and further growth deceleration in China all pose risks to this forecast.

In its regional analysis, worldsteel said China’s steel demand is expected to decline by one percent in 2021 amid the continued negative trend in the real estate sector. No growth in China’s steel demand is expected in 2022, due to the government policy stance on rebalancing and environmental protection. Steel demand in the developing economies excluding China continued to recover in 2021, supported by the recovery in commodity prices and international trade. In 2022, as vaccinations progress, conditions in the developing economies are expected to improve, but the pandemic will leave a lasting impact on these economies through weakened financial positions and accumulated structural challenges. As for Turkey, steel demand in the country is expected to continue to show high double-digit growth in 2021, driven by infrastructure projects and industrial activity, and is forecast to exceed the pre-currency crisis level of 36 million mt in 2022. Steel demand in advanced economies is expected to increase by 12.2 percent in 2021 and 4.3 percent in 2022, reaching its pre-pandemic level.

Regarding the steel-using sectors, the global construction sector is expected to show a robust recovery in 2021 with low interest rates and governments focusing on infrastructure projects as part of their recovery plans. According to worldsteel, the disruptions in the supply chain are significantly undermining the global automotive industry’s recovery. With pent-up demand dissipating, the growth in auto production in 2022 will decelerate, though high order backlogs will provide some support.

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