Global steel demand to rebound 2.3% in 2023 - WSA

Global steel demand is forecast to rebound by 2.3% from the previous projection of 1% to reach 1.82 billion tonnes in 2023, and will see a further growth of 1.7% to 1.85 billion tonnes in 2024, according to the latest short-range outlook for 2023 and 2024 released by World Steel Association (WSA) on April 18.

Manufacturing is expected to lead the recovery, but high interest rates will continue to weigh on steel demand. And next year, growth may accelerate in most regions, but deceleration is expected in China, the association predicted.

"Persistent inflation and high-interest rates in most economies will limit the recovery of steel demand in 2023, despite positive factors like China's reopening, Europe's resilience in the face of the energy crisis, and the easing of supply chain bottlenecks," Maximo Vedoya, chair of the WSA's Economics Committee, was quoted saying in the release.

"In 2024, demand growth is driven by regions outside China but faces global deceleration due to China's anticipated 0% growth, overshadowing the improved environment," Vedoya said, adding that "as China's population declines and moves to consumption-driven growth, its contribution to global steel demand growth will lessen."

Back in 2022, China's steel demand weakened due to the pandemic, combined with negative momentum in both construction and manufacturing sectors, the release noted.

For example, China's floor space of newly-started projects slumped 39.4% and investment in real estate down 10% last year - the first on-year decline in 25 years, according to the WSA data.

However, a slight pick-up in China's real estate sector is likely to appear in the later part of 2023 due to government support measures, and the recovery is expected to continue in 2024, though will only be moderate, the release said.

And China's manufacturing sector is also estimated to show only a moderate recovery in 2023-2024, with slowing exports.

As such, WSA estimated China's total steel demand to grow 2% this year and to stay flat in 2024.

Elsewhere, steel demand dynamics in emerging and developing economies are diverging, with developing Asia excluding China showing more resilience, the release pointed out. Moreover, investments in decarbonization will also drive positive momentum for global steel demand.

"Future global steel demand growth will rely on reduced drivers, primarily concentrated in Asia," Vedoya remarked.

India, for example, is expected to witness a healthy steel demand growth of 7.3% in 2023 and 6.2% in 2024, according to the release.

As the world's second-largest steel-producing country, India's total crude steel output increased by 5.5% on year to reach 124.7 million tonnes in 2022, Mysteel Global learned from the WSA data.

Written by Carly Chen, chenziyi@mysteel.com
Edited by Zhenqi Yang, yangzhenqi@mysteel.com

Note- This article is being written in accordance with an article exchange agreement between Mysteel Global and Steelmint.