The World Steel Association (worldsteel) expects steel demand to increase by 5.1pc in 2021 to 1.8bn mt compared to a 0.2pc decline in 2020.
Demand in 2022 is also likely to further grow by 2.7pc to 1.9bn mt compared to this year, provided the vaccination drive globally is able to reduce the impact of the virus, worldsteel stated.
China
Steel demand in China could grow by 3pc in 2021 after remaining subdued last year, worldsteel projected. However, the country’s steel sector growth is expected to decline by 1pc in 2022 as the government-aided stimulus subsidies end.
Worldsteel indicated that the global steel industry was only affected by 0.2pc drop in demand last year mainly because of China’s robust growth in demand by 9.1pc while the rest of the world saw a drop of 10pc.
Although the country’s economy dropped in February last year, it recovered by May. China’s steel usage in the construction and machinery sector increased by 9.1pc last year. Investment in the infrastructure projects grew only 0.9pc after the government halted a few projects to support economic growth.
Advanced economies
Steel demand in advanced economies dropped by 12.7pc in 2020 because of lower activity levels in the market due to COVID-19. WorldSteel, however, expects steel demand to grow by 8.2pc and 4.2pc in 2021 and 2022, respectively.
Steel demand in the US fell by 18pc last year, despite the supportive stimulus offered by the government. The Biden government recently announced an infrastructure plan that may have the potential to grow demand, but a weak rebound in the non-residential construction and energy sector could pull growth down. That said, the US automotive sector is projected to recover strongly.
Steel demand in the EU27 and UK dropped by 11.4pc in 2020 with a strong recovery due to growing automotive and construction sectors. However, there is still uncertainty because of the ongoing third wave in the region.
Japan’s steel demand is expected to bounce back after a 16.8pc decline in 2020 on the automotive and industrial machinery exports sectors’ recovery. South Korea’s steel demand declined by 8pc last year due to contraction in the automotive and shipbuilding sectors. However, these two industries will bring the country’s economy back on a growth path in 2021 and 2022, WorldSteel stated.
Developing economies (ex-China)
Steel demand in developing economies is expected to recover by 10.2pc and 5.2pc in 2021 and 2022, respectively, after a 7.8pc decline last year.
India’s steel demand dropped by 13.7pc in 2020 after an extended period of lockdowns. However, the country’s demand is expected to surpass 2019 levels this year with a 19.8pc increase because of a growth-oriented government agenda.
In the ASEAN region, steel demand contracted by 11.9pc in 2020 with Malaysia and the Philippines being the most affected. Recovery is expected amid a growing construction industry by 2022. Steel demand in the MENA region also dropped by 9.5pc last year due to the cancelation of construction projects. However, rising infrastructure investments are slated to grow the demand for steel in this region in 2021.
In Latin America, Mexico’s steel demand fell last year due to the lack of auto production but is expected to recover amid improved auto output. While Brazil was severely hit by the pandemic the economy still recovered after a severe drop in Q2 last year with the help of government aids and will continue to recover this year.
Russia’s steel demand did not drop much because of supportive government measures while Turkey maintained its recovery momentum in 2020, worldsteel noted.