The World Steel Association (worldsteel) believes that demand for steel this year will grow by 4.5%, a significant rise on the 0.1% recorded during the key pandemic year of 2020. Its latest Short Range Outlook assumes that future waves of the Covid virus will be less damaging and disruptive with an expected growth in 2022 of 2.2%.
According to world steel, anticipated demand for steel of 1 855.4 million tonnes in 2021, rising to 1 896.4 million tonnes next year, is a stronger recovery than expected. Saeed Ghumran al Remeithi, who chairs the worldsteel Economics Committee, said there had been upward revisions in the 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 report notes that although the manufacturing sector’s recovery remained more resilient to new waves of infection, supply-side constraints led to a levelling off of the recovery in the second half of the year and are preventing a stronger recovery. But it warns: ‘Persistent rising inflation, continued slow vaccination progress in developing countries and further growth deceleration in China all pose risks to this forecast.’
The outlook for China notes ‘marked signs of deceleration’ in the steel-using sector since July, leading to a steel demand contraction of -13.3% in July and -18.3% in August. It says this is partly attributable to recent adverse weather and Covid infection waves but more substantive causes include a slowing momentum in the real estate sector and a government cap on steel production.
‘From a high base last year and with a continued negative trend in the real estate sector, Chinese steel demand will have negative growth for the rest of 2021,’ the outlook says. ‘As a result, while the January to August apparent steel use still stands at a positive 2.7%, overall steel demand is expected to decline by -1.0% in 2021.’