WSA’s forecast for the on-year dip in global steel demand this year reflected “the repercussion of persistently high inflation and rising interest rates globally,” but demand from the infrastructure construction may give a marginal boost to steel demand in 2023, according to the association.
“High energy prices, rising interest rates, and falling confidence have led to a slowing in steel-using sectors’ activities,” Máximo Vedoya, chairman of the worldsteel Economics Committee, was quoted commenting the outlook. “As a result, our current forecast for global steel demand growth has been revised down compared to the previous one,” he added.
WSA predicted in April that global steel demand may inch up by 0.4% on year this year and being 2.2% higher on year in 2023, as Mysteel Global reported.
As for China, the country’s steel demand in 2022 may slide by 4% on year due to the impact of COVID-19 outbreaks and weakening property market, according to WSA. And for 2023, “(China’s) new infrastructure projects and a mild recovery in the real estate market could prevent further contraction of steel demand,” WSA pointed out, saying that China’s steel demand in 2023 may remain flat.
Meanwhile, the improvement in steel demand in developed economies globally saw a major setback this year as a result of “sustained inflation and lasting supply side bottlenecks,” WSA noted.
The European Union, for example, may post a 3.5% on-year drop in steel demand this year due to high inflation and the energy crisis. In 2023, steel demand in this region may continue to contract on the premise of adverse winter weather or further disruptions to energy supplies, WSA estimated.
Steel demand in the world’s developed countries is forecast to slip by 1.7% this year and to reverse up by a minor 0.2% in 2023, as against the 16.4% on-year growth in 2021, according to the release.