Worldsteel Raises Asia Demand Forecasts Despite Covid

Last week, the World Steel Association raised its forecasts for demand in East and Southeast Asia, excluding China, in its short-term forecast last week. The recovery in demand in developing Asia continues despite the continued presence of Covid-19.

In Japan, worldsteel notes that demand continues to recover at the expense of manufacturing. Despite the chip shortage, car production has surged from the 2020 lows, and civil engineering spending is also driving demand. However, private investment in construction continues to lag. Apparent steel demand is expected to be 58 million tonnes in 2021, up from 52.6 million tonnes in 2020 and the previous forecast of 56 million tonnes. Japan is expected to consume 59.2 million tonnes of steel in 2022, up from the previous forecast of 58.8 million tonnes.

Meanwhile, in South Korea, demand is recovering to 2019 levels faster than expected. Apparent consumption in 2021 is expected to reach 53.4 million tonnes this year, up from the previous forecast of 51.5 million tonnes. Demand fell to 49 million tonnes in 2020. According to worldsteel, this was driven by a rebound in exports and investment in manufacturing, while construction is being supported by civil and housing projects. The surge in new orders in shipbuilding will also ensure a steady growth in demand in the future. In 2022, worldsteel expects Korea's apparent steel demand to reach 54.2 million tonnes, up from the previous forecast of 52.8 million tonnes.

Meanwhile, ASEAN steel demand is also being revised upward, despite the ongoing burden of Covid lockdowns in many countries. ASEAN steel demand is currently expected to recover to 74.8 million tonnes in 2021 from 70.1 million tonnes in 2020 and from an earlier forecast of 73 million tonnes. Demand may increase to 78.8 million tonnes in 2022, up from the previous forecast of 77.7 million tonnes.

However, measures to combat Covid are having an impact. Vietnam's apparent steel demand is expected to reach 23.9 million tonnes in 2021, up from 23.3 million tonnes in 2020, but below the previous forecast of 24.5 million tonnes. In 2022, demand in Vietnam will recover to 25.1 million tons, but this is still below the previous forecast of 26.3 million tons.