Europe-based international trade body for the iron and steel industry, World Steel Association (worldsteel) has revealed that global steel demand will rise by 4.5 percent in 2021 and reach 1,855.4 Mt after 0.1 percent growth in 2020.
In 2022, steel demand will see a further increase of 2.2 percent to hit 1,896.4 Mt, noted worldsteel in its short-range outlook released by its economic committee, led by its chairman and CEO of Emirates Steel Engineer Saeed Ghumran Al Remeithi, at its bi-annual meeting in Brussels, Belgium.
The estimate implies that “as immunizations extend over the world, the transmission of coronavirus variations will be less harmful and disruptive than earlier 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. Strong manufacturing activity bolstered by pent-up demand is the main contributor. 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.”
“While the manufacturing sector’s recovery remained more resilient to the new waves of infection than expected, supply-side constraints led to a leveling off of the recovery in the second half of the year and are preventing a stronger recovery in 2021. But with high backlog orders combined with a rebuilding of inventories and further progress in vaccinations in developing countries, we expect steel demand will continue to recover in 2022,” he commented.
Mr. Al Remeithi further added, “Steel demand recovery in the GCC fell short of expectations on the back of reduced construction activity due to fiscal consolidation efforts. However, in 2022, with rising oil prices and the pandemic under control, steel demand is expected to rebound more strongly.”
Since July, there have been clear indicators of a slowdown in the steel-consuming sector’s activities, with steel demand contracting by -13.3 percent in July and then -18.3 percent in August. “The sharp deceleration is attributable to the slowing momentum in the real estate sector and the government cap on steel production,” as per the reports.