World Steel Association: Steel Demand Down 6.4%

The World Steel Association (worldsteel) has published its short-term forecast (SRO) for 2020 and 2021. In 2020, worldsteel predicts that steel demand will decline by 6.4%, falling to 1,654 million tons due to the COVID-19 crisis. Steel demand is expected to rebound to 1,717 million tonnes in 2021, up 3.8% from 2020.

The contraction in global steel demand this year will be mitigated by an expected faster recovery in China than in the rest of the world.

The outlook assumes that lockdowns in most countries will continue to loosen during June and July, with social distancing controls remaining in place and that major steel economies are not suffering significant secondary waves of the pandemic.

Commenting on the outlook, Mr Al Remeiti, Chairman of the World Economy Committee, said:

“The COVID-19 crisis, with its disastrous public health consequences, is also a huge crisis for the global economy. Our customers have suffered from a general freeze in consumption, shutdowns and supply chain disruptions. Therefore, we expect a significant decline in steel demand in most countries, especially in the second quarter. With the easing of restrictions that began in May, we expect a gradual improvement in the situation, but the recovery path will be slow.

However, it is possible that the decline in steel demand in most countries will be less severe than during the global financial crisis, as the consumption and service sectors that have been hit hardest have become less intense. In many advanced economies, steel demand was already weak but has not fully recovered since 2008.

Let me emphasize that this forecast is presented at a time of high uncertainty. As the economy reopens without a vaccine or medicine, there is a significant downside risk. If the virus can be contained without the second and third peaks and if government incentives continue, we can see a relatively quick recovery. ”

Recovery perspective

As most countries gradually renew their restrictions from mid-May, economic activity is expected to recover in the third quarter.

While the lockdown has affected all steel industries, the mechanical engineering and automotive sectors are subject to a prolonged demand shock as well as disruption to global supply chains. Changes have been made to working procedures in the steel sectors to meet social distancing requirements. This change in work environment will potentially lead to