BRUSSELS (TLTP): Global demand for steel is expected to return to pre-Covid-19 levels in 2021 with the exception of China, as resurgent demand continues to fuel strong manufacturing activity, according to a new report from the World Steel Association (worldsteel).
The Brussels-based industry group’s economic committee projects demand to grow 4.5 percent in 2021 to reach 1,855.4 metric tonnes after a tepid 0.1 percent growth in 2020, with growth further rising by 2.2 percent to 1,896.4 metric tonnes in 2022. The forecast takes into account the vaccination programmes around the world, and less-disruptive nature of coronavirus variants compared with previous waves.
The pandemic upended the global economy, forcing industries engaged in steel, including construction, autos and durable goods, to halt projects or scale down manufacturing as demand dried up. But with restrictions largely lifted and economies reopening, industry stakeholders are making up for lost time and keeping up with rejuvenated demand.
Demand in China dropped 13.3 percent in July and 18.3 percent in August because of the slowing momentum in the real estate sector and the government cap on steel production. Activity also weakened owing to tough government measures on developers’ financing that were introduced in 2020. Chinese steel demand will have negative growth for the rest of 2021.
In the US, demand was aided by the strong performance of the automotive and durable goods sectors, but shortage of some components is undermining this recovery. Recovery in the European Union is gathering pace, with all steel-using sectors exhibiting a positive recovery despite continuing waves of infection.
Japan’s rising exports, investment and consumption have aided steel’s recovery, with the manufacturing, automotive and machinery sectors leading the way. South Korea’s steel demand is expected to recover to 2019 levels this year, supported by improving exports and investment in manufacturing facilities.
In developing economies excluding China, steel demand continued to rebound in 2021, aided by the recovery in commodity prices and international trade. However, new Covid waves combined with low vaccination levels and a slow recovery in international tourism restrained developing economies. India suffered only a minor downward revision and will show a strong recovery in 2021, with steel demand to reclaim the 100-million-tonne mark this year.
