The World Steel Association (worldsteel) expects global demand to slow this year, largely because the war in Ukraine is increasing uncertainty. The organization’s recently released short-term outlook for 2022 and 2023 predicts steel demand growth of 0.4% this year (total 1,840.2 million tonnes) and 2.2% (1 881.4 million tonnes) in 2023.
Máximo Vedoya, chairman of the economic committee of worldsteel, said: “These short-term outlook is published in the shadow of the human and economic tragedy that followed the Russian invasion of Ukraine. For 2022 and 2023, the outlook is very uncertain. The expectation of a continued and stable recovery from the pandemic has been shaken by the war in Ukraine and rising inflation.
The outlook indicates that the magnitude of the impact of the conflict will vary by region, with an immediate devastating effect on Ukraine, consequences for Russia and a major impact on the EU due to its energy dependence. Russia and its geographical proximity to the conflict zone. Forecasts assume that the fighting will end this year, but sanctions against Russia will largely remain.
He adds: “The impact will also be felt globally via rising energy and commodity prices – especially raw materials for steel production – and continued supply chain disruptions. supplies, which troubled the world steel industry even before the war. In addition, financial market volatility and heightened uncertainty will undermine investment.
He believes that the war in Ukraine has important long-term implications for the global steel industry: possible readjustment of global trade flows; developments in energy trading; and further reconfiguration of global supply chains.
- Chinese demand for steel has slowed in 2021 due to tough government measures imposed on property developers. Steel demand in 2022 is expected to remain stable as the government attempts to boost infrastructure investment and stabilize the property market. “There is upside potential from more substantial stimulus, which is likely if the economy faces more challenges from the deteriorating external environment.”
- Steel demand has recovered strongly in 2021, especially in the EU and the US. “The impact of the war in Ukraine will be particularly pronounced in the EU due to its heavy reliance on Russian energy and refugee flows.” Steel demand in the developed world is expected to increase by 1.1% and 2.4% in 2022 and 2023 respectively, following a 16.5% recovery in 2021.
- Developing economies faced more difficulties with the continued impact of the pandemic and soaring inflation, which triggered a cycle of monetary tightening in many emerging economies. After falling 7.7% in 2020, steel demand in the developing world excluding China grew 10.7% in 2021, slightly less than worldsteel’s previous forecast.
- Global construction activity continued to recover from lockdowns to register 3.4% growth despite a contraction in China in 2021. “The recovery of the global auto industry in 2021 has been disappointing as bottlenecks in the supply chain stalled the momentum of recovery in the second half of the year.’ Despite the fall in global car production, the electric vehicle (EV) segment has grown exponentially during the pandemic and the share of EVs in total car sales has increased from 2.49% in 2019 to 8.57% in 2021.
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