he World Steel Association updated short-range outlook has become more optimistic for 2021 than its previous version issued in June. While a decline in demand for 2020 is forecast, the decline is less severe than previously expected.
In 2020, worldsteel forecasts that steel demand will contract by 2.4 percent, dropping to 1.725 billion metric tons, due to the COVID-19 pandemic. In 2021, steel demand is expected to recover to 1.795 billion metric tons, an increase of 4.1 percent over 2020.
The post-lockdown recovery in steel demand outside China has been stronger than was earlier expected, but it still marks a deep contraction, both from developed and emerging economies, with only a partial recovery expected in 2021.
The updated forecast assumes that despite the current resurgence in infections in many parts of the world, nationwide lockdowns will not be repeated. Instead, selective and targeted measures will be used to attempt to contain this second wave.
“The recovery is uneven across countries depending on their success in containing the virus, the national industry structure and finally economic support measures,” comments Al Remeithi, chairman of worldsteel’s Economics Committee.
China, he says, saw a “surprisingly resilient rebound, contributing to a major upward revision of the global growth forecast for 2020.” However, the crisis was “particularly challenging for developing economies as they continue to struggle with the uncontrolled virus, low commodity prices, and falls in exports and tourism.”
The pandemic accelerated megatrends that have been slowly transforming the industrial landscape, “leading to a lasting impact far greater than short-term demand consequences,” Remeithi says.
In the U.S., recovery from the lockdown has been strong, propelled by substantial government support measures, according to worldsteel. “The manufacturing downturn was shorter and less acute than expected. However, the U.S. is still struggling to control the virus’s spread, and the recovery momentum might taper off in the coming months.”
The U.S. outlook for 2021 includes subdued expectations for construction and auto production.
The construction sector remained more resilient to the COVID-19 shock as many governments implemented public projects. Following the easing of lockdown, this continued throughout advanced economies, mostly driven by infrastructure investment, pent-up demand and low mortgage rates.
The automotive sector suffered dramatic consequences from the pandemic. In April, automotive production fell by 70 to 90 percent in many countries. Post-lockdown recovery has been constrained by a slow return in demand.
From January through August, vehicle production in Germany and the U.S. fell more than 30 percent compared with the same 2019 period.
For more on automotive industry developments, particularly with regard to the role of specifying aluminum products for lightweighting components, check out the cover story in this issue (page 14).
Our Modern Metals family hopes that your family can get together safely and give thanks for what you do have in a tumultuous year.
