Global steel demand to rise 4.1% on year in 2021 - WSA

Steel demand worldwide is expected to strengthen 4.1% on year in 2021, with growth in Asia staying healthy and contributing to the bulk of the world's total consumption, Frank Zhong, the chief representative of the World Steel Association's Beijing office told delegates attending the Imports & Exports Forum of Mysteel's Annual Summit on December 18.

Global steel demand next year is estimated to reach nearly 1.8 billion tonnes, among which the demand in Asia would account for 1.3 billion tonnes or 72.8%, up by 2.5% on year, Zhong declared.

China has already surprised the world this year, as the country's steel demand is expected to increase 8% on year to 980 million tonnes in 2020 - when most regions worldwide have been severely impacted by the virus outbreak, he remarked.

In 2020, global steel demand is forecast to drop 2.4% on year to 1.7 billion tonnes, which is in sharp contrast to the positive growth seen in China. For the coming 2021, China's steel demand is expected to stay stable on year at 980 million tonnes, according to him.

Steel demand in some countries will be very resilient, Zhong observed. India, for example, might experience a decline of 20.2% on year in its steel demand in 2020 to 81.9 million tonnes, but the country's demand would likely rebound by a remarkable 22.7% on year to 100.4 million tonnes in 2021.

Overall, steel demand in developing countries is much stronger than in developed economies, and the gap between them has been widening over the past few years, Zhong stated. Steel consumption in developed countries has yet to return to the level seen prior to the financial crisis in 2008 while demand in developing economies - especially in China - has rapidly increased.

But Zhong warned that the wariness of investors worldwide would dampen the prospects for the construction industry, as global investments in this sector in H1 2020 declined by a huge 49% on year, and total investments for the whole 2020 are expected to drop 40% on year.

In the long run, there is still huge potential for steel consumption to increase, according to him. In 2050-2060, the world's population is expected to increase by some 2-2.3 billion. Given that globally, current per-capita steel consumption is 0.2t/person, this means "if the global economy maintains its current pace of growth, the 2.3 billion rise in population will bring another 400 million tonnes of (annual) consumption," Zhong suggested.

As for steel production next year, Zhong noted that the pandemic's impact has been comparatively limited, thanks to the effective virus control measures in those parts of Asia where steel production is concentrated. Steel production in East Asia accounts for 65% of total global production, but the cumulative total of confirmed virus cases in the region only accounts for some 0.4% of the world's total, he noted.

Written by Anna Wu, wub@mysteel.com

This article has been published under an article exchange agreement between Mysteel Global and SteelMint.

Photo: WSA