Industry body the World Steel Association (worldsteel) forecasts in its ‘Short Range Outlook for 2021 and 2022’ that steel demand will grow by 5.8% to1.87-billion tonnes this year.

The association expects further steel demand of 2.7% to reach 1.92-billion tonnes in 2022.

“Despite the disastrous impact of the [Covid-19] pandemic on lives and livelihoods, the global steel industry was fortunate enough to end 2020 with only a minor contraction in steel demand. This was due to a surprisingly robust recovery in China, with growth of 9.1%. In the rest of the world, steel demand contracted by 10%,” says worldsteel economics committee chairperson Al Remeithi.

“In the coming years, steel demand will recover firmly in developed and developing economies, supported by pent-up demand and governments’ recovery programmes. However, for most developed economies, a return to the prepandemic levels of steel demand will take a few years.”

The forecast assumes that the ongoing second or third waves of Covid-19 infections will stabilise in the second quarter and that steady progress on vaccinations will be made, allowing a gradual return to normality in major steel-using countries.

While it is hoped that the worst of the pandemic is passing, there is still considerable uncertainty regarding the rest of this year.

However, the evolution of the virus and progress of vaccinations, withdrawal of supportive fiscal and monetary policies, geopolitics and trade tensions could all affect the recovery envisaged in worldsteel’s forecast, he notes.

“For the future, structural changes in a postpandemic world will bring about shifts in steel demand shape. The steel industry will see exciting opportunities from rapid developments through digitalisation and automation, infrastructure initiatives, reorganisation of urban centres and energy transformation – all at the same time as the industry is responding to the need to produce low-carbon steel,” says Remeithi.

After the free-fall in economic activity in advanced economies during the second quarter of 2020, the industry generally rebounded quickly in the third quarter, largely as a result of the substantial fiscal stimulus measures and pent-up demand.

However, activity still remained below the prepandemic level at the end of 2020. As a result, the developed world’s steel demand recorded a double-digit decline of 12.7% in 2020.

“We will see substantial recovery in 2021 and 2022, with growth of 8.2% and 4.2% respectively. However, steel demand in 2022 will still fall short of 2019 levels,” he points out.

Meanwhile, the European Union’s (EU’s)steel-using sectors experienced a stronger- than-expected post-lockdown rebound in manufacturing activity, owing to supportive government measures and pent-up demand.

“The recovery in 2021 and 2022 is expected to be healthy, driven by recovery in all steel-using sectors, especially the automotive sector, and public construction initiatives. So far, the EU’s recovery momentum has not been derailed by the ongoing third waves, but it remains fragile.”

Generally speaking, developing economies, excluding China, suffered more from the pandemic relative to developed economies, with inadequate medical capacity, a collapse in tourism and commodity prices, and insufficient fiscal support.