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Steel demand for 2022/23 forecasted to be flat

The World Steel Association (worldsteel) anticipates a weak demand

In a Short Range Outlook (SRO) for 2022/2023, worldsteel projected demand will grow by 0.4 per cent this year reaching 1,840.2 mt, after increasing by 2.7 per cent in 2021. It also anticipated 2023’s steel demand to further grow by 2.2 per cent to reach 1,881.4 mt.

Factors driving the flat growth
Things started to look up in 2021 after the globe’s pandemic management showed improvement. Máximo Vedoya, Chairman of the worldsteel Economics Committee, said of the SRO: “This is issued in the shadow of the human and economic tragedy following the Russian invasion of Ukraine…” Worldsteel felt the impact of this conflict will vary across regions, depending on their direct trade and financial exposure to Russia and Ukraine.

There are immediate devastating effects on Ukraine, consequences for Russia, major impact on the European Union due to its reliance on Russian energy, as well as its geographic proximity to the conflict. The impact will be felt globally via higher energy and commodity prices – especially raw materials for steel production, and continued supply chain disruptions troubling the global steel industry before the war. Furthermore, financial market volatility and heightened uncertainty will undermine investments.

Secondly, China’s string of issues contributed to the decline. President Xi’s vowing to reduce carbon emissions led to a massive shortage of coal inventory where parts of the country suffered power outages. Subsequently, China’s real estate were forced to halt from hiked steel prices given raw materials were in dangerously low supplies.

worldsteel expects China’s steel demand in 2022 to remain flat as the government tries to boost infrastructure investment and stabilise the real estate market. The stimuli introduced in 2022 are likely to support small positive growth in 2023. There is upside potential from more substantial stimulus measures, which is likely if the economy faces more challenges from the deteriorating external environment.

Overall, worldsteel observed demand in the developing economies excluding China grew by 10.7 per cent in 2021, slightly less than earlier forecasts. In 2022-2023, it will continue to face challenges from the worsening external environment, the Russia-Ukraine conflict, and US monetary tightening, leading to low growth of 0.5 per cent in 2022 and 4.5 per cent in 2023.

Marine Online News Team
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