Worldsteel has revised up its forecast for global finished steel demand thanks mainly to China’s stunning rebound following the initial Covid-19 pandemic shock at the start of the year. Global demand is now seen falling only -2.4% on-year in 2020 to 1.725 billion tonnes.

This compares to the -6.4% decline forecast in worldsteel’s previous short-range outlook (SRO) in June. This is a difference of 71.2 million tonnes, indicating sentiment has improved significantly.
Chinese steel demand is now seen growing 8% in 2020 to 980.1mt, almost equalling its 2019 growth rate. This will be aided by government infrastructure stimulus and a strong property market.

The world excluding China, however, has seen a deep demand contraction as a result of the pandemic and is unlikely to return to pre-Covid-19 levels until at least 2022, worldsteel director general Edwin Basson said. Demand in the world excluding China is forecast to slump -13.3% in 2020 to 745mt. This compares to the -14.2% drop forecast in June.

A recovery from the pandemic remains fragile due to the second wave of infections, continued social distancing measures, elevated unemployment and weak confidence. “The risk is tilted toward the downside,” worldsteel says. “A W-shaped recovery cannot be ruled out and a full recovery in 2021 is unlikely.”

However, the forecast assumes that despite the current resurgence in infections in many parts of the world, nationwide lockdowns will not be repeated. “What we will most likely see is the desire by governments and societies to at least keep their economic systems ticking over,” Basson commented.