The World Steel Association has released an update of its Short Range Outlook for the two-year period 2021/2022. What emerges primarily is one growth in demand for steel which will affect both years: + 4,5% in 2021 and a further + 2,2% in 2022.
It should be noted that this forecast assumes the progress of vaccinations around the world and the decrease in the diffusion of variants of virus.
The role of vaccinations and government support
2021 was a surprisingly good year for the steel market, with higher-than-expected demand growth.
The positive momentum reflects the restart of countries where government support and high vaccination rates have been recorded.
The situation in emerging countries
In emerging economies, in particular the Asian ones, the rise in infections has, on the other hand, shooting stopped.
In 2022, further advances in vaccinations in these regions, combined with the need to fulfill back orders, while rebuilding stocks, will foster continued upturn in steel demand.
The Chinese question
La deceleration of the Chinese economy however, it represents a considerable risk for forecasts.
Since July there have been slowdowns in the sector using steel, with a contraction in demand which reached -18,3% in August.
This was caused by adverse weather conditions, waves of infections and above all the slowdown in the real estate sector and the government’s ceiling on steel production.
And also for 2022 the China remains excluded from the list of countries where steel demand is expected to grow.
Developed countries and the return to pre-Covid levels
in developed countries for 2022, a reduction of bottlenecks in the supply chain and a growing confidence of businesses and consumers are expected.
The demand for steel has already been helped for some time by the good performance of sectors automotive and durable goods, although the shortage of some components is undermining this recovery.
Despite this obstacle, several nations in the bloc are soon preparing to celebrate the industry’s long-awaited return to pre-Covid levels.
Source: World Steel Association