STEEL DEMAND TO GROW BY ALMOST 7% IN 2022

The World Steel Association has just released an update on its near-term outlook for the coming years 2021 and 2022. It forecasts steel demand to grow by 4.5% this year to 1,855.4 Mt. In 2022, steel demand will see a further increase of 2.2% to 1,896.4 Mt. Data that determine that the progress of vaccinations around the world, the spread of variants of the COVID virus will be less damaging and disruptive than that observed in previous waves.

Al Remeithi, chairman of Worldsteel’s Economics Committee says that 2021 has seen a stronger than expected recovery in steel demand, which has led to upward revisions in our forecast across the board, except in China .

Strong manufacturing activity driven by pent-up demand is the main contributor. Developed economies have outperformed our earlier expectations by a larger margin than developing economies, reflecting the positive benefit of higher vaccination rates and government support measures.

While the manufacturing recovery remained more resilient to new waves of infection than expected, supply-side constraints led to a stabilization of the recovery in the second half of the year and are preventing a stronger recovery in 2021. But with a large backlog of orders. combined with a rebuilding of inventories and further progress on vaccines in developing countries, we expect steel demand to continue to recover in 2022.

Remeithi also notes that persistently rising inflation, continued slow progress on vaccination in developing countries, and a further slowdown in growth in China pose risks to this forecast.

The Chinese economy maintained its strong recovery momentum from 2020 to early 2021. However, it has slowed since June. No growth in steel demand is expected in 2022, with the property sector depressed in line with the government’s policy stance on rebalancing and environmental protection. Some restocking activities could support the apparent use of steel. Recent action by the government to push for a transition away from the real estate-dependent growth model is likely to continue.

In the US, the economy continues its solid recovery, driven by pent-up demand and a vigorous policy response. Steel demand was boosted by strong performance in the automotive and durable goods sectors, but shortages of some components are undermining this recovery. Momentum in the construction sector is weakening with the end of the residential construction boom and sluggish non-residential sector activities.

In the EU, the recovery in steel demand that started in the second half of 2020 is gaining momentum, with all steel-using sectors showing a positive recovery despite continuing waves of infection.

In Asia, the recovery in steel demand was not interrupted and the forecast was revised upwards, helped by the strong rebound in global trade and government infrastructure programs.