Global steel demand downgraded, to drop 2.3% in 2022

GLOBAL steel demand will erode this year by 2.3 per cent due to surging inflation and climbing interest rates, the World Steel Association (WSA) said on Wednesday (Oct 19), downgrading their forecast.

The industry group revised its April forecast, which saw steel consumption edging up by 0.4 per cent in 2022, after deteriorating economic conditions, including a slowdown in top consumer China, a statement said.

A global recovery in steel demand next year is still expected, mainly due to a rise in infrastructure spending, but the growth will be 1 per cent instead of 2.2 per cent as forecast earlier this year, the WSA said.

“2022 might have been the worst year and 2023 might be looking better,” WSA director general Edwin Basson said in an online presentation.

“We are seeing very, very strong driving forces beginning to stack up that indicates that there will be growth in... infrastructure.”

Steel demand is now expected to fall to 1.797 billion tonnes in 2022 with the sector also hit by supply chain constraints, according to the group of producers that accounts for about 85 per cent of global steel output.

Supply bottlenecks during the pandemic had started to ease, but the war in Ukraine and China’s strict Covid-19 containment policies mean they were still an issue, the industry group said in a statement.

The Covid lockdowns in China were a big factor in a reversal of steel demand from a recovery in late 2021 to a decline by the second quarter of this year, it added.

Steel demand in China, which accounts for 51 per cent of global consumption, is forecast to drop by 4 per cent in 2022 and be flat next year.

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