WorldSteel predicts slow growth in global steel demand in 2022

BY ONOME AMUGE

Global steel demand is likely to rise 0.4 percent to 1.84 billion tonnes in 2022, slowing from a 2.7 percent growth in 2021, undermined by the uncertain outlook created by the persisting war in Ukraine, the World Steel Association (WorldSteel) announced.

The association further disclosed that the demand in China, which accounts for about half of global steel consumption, is expected to remain flat this year as the government tries to boost infrastructure investment and stabilise the real estate market.

With inflation expected to cloud the outlook for steel demand globally, Máximo Vedoya, chairperson, Worldsteel economics committee, observed that the expectation of a continued and stable recovery from the pandemic has been shaken by the war in Ukraine and inflationary pressure.

Vedoya explained that the impact will be felt on a global scale through higher energy and commodity prices, especially raw materials for steel production and continued supply chain disruptions, which were troubling the global steel industry even before the war.

WorldSteel projected that further downside risks from the continued surge in virus infections in China, rising financial market volatility and heightened uncertainty in the steel market will undermine investments in 2022.

The association also predicted that the war in Ukraine will come to an end in the course of 2022, but that the sanctions imposed on Russia will largely remain.

In addition, it said the geopolitical situation surrounding Ukraine poses significant long-term implications for the global steel industry, among which are a possible readjustment in global trade flows, a shift in energy trade and its impact on energy transitions, and continued reconfiguration of global supply chains.

Steel demand in the developed world is forecast to increase by 1.1 percent and 2.4 percent in 2022 and 2023 respectively, after having recovered by 16.5 percent in 2021.