Brussels April 15 2022: The World Steel Association forecasts steel demand to edge up 0.4% in 2022 to 1.84 billion mt and grow a further 2.2% in 2023 to 1.88 billion mt, according to its Short Range Outlook released April 14.
Steel demand rose 2.7% in 2021 to 1.83 billion as recovery from the pandemic was stronger than expected in a number of regions, although there had been a sharper-than-anticipated deceleration in China, worldsteel Economics Committee Chairman Maxino Vedoya said in a statement.
"For 2022 and 2023, the outlook is highly uncertain. The expectation of a continued and stable recovery from the pandemic has been shaken by the war in Ukraine and rising inflation," Vedoya said.
The association expected reduced demand growth in 2022 due to impacts from the war in Ukraine, with further downside risks from the continued pandemic, especially in China, and rising interest rates.
"We expect growth to start coming in 2023 and this is on the presumption that the war in Ukraine will come to a conclusion sometime in this year and at least the end of this year we will begin to see a recovery in the steel use in those markets, but throughout our forecasts we have assumed that steel use in Russia and Ukraine is going to be way down from previous years, and that the impact will flow over," worldsteel Director General Edwin Basson told a press briefing April 14.
He said the war was most likely to impact Europe due to its reliance on Russian energy and its geographic proximity, but other regions would see less of an impact depending on their direct trade and financial exposures to Russia and Ukraine.
In the EU and the UK, steel demand was expected to fall 1.3% in 2022 to 161.5 million mt due the region's high dependence on Russian energy and refugee inflows, although demand was expected to grow 4% in 2023, the association said.
In the developed world, steel demand was expected to increase by a lower 1.1% in 2022 and 2.4% in 2023, after rising 16.5% in 2021.
There was expected to be a global impact from the war causing continued supply chain disruptions, higher energy and commodity prices, especially for steel raw materials, and financial market volatility and uncertainty undermining investment.
"The geopolitical situation surrounding Ukraine poses significant long-term implications for the global steel industry. Among them 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," worldsteel said.
It said emerging economies outside of China would face challenges from the worsening external environment, the war, and US monetary tightening, leading to low growth of 0.5% in 2022 to 484.4 million mt and 4.5% in 2023, down from a growth of 10.7% in 2021.
"The expected tightening of US monetary policies will hurt financially vulnerable emerging economies," worldsteel said.