World Steel Association released 2022 demand forecast: China was flat, 4.7% foreign growth, and 2.2% global growth (Excerpt)

Commenting on the forecast results, Al Remeithi, Chairman of the World Steel Association's market research Committee, said: "in 2021, the recovery of global steel demand exceeded expectations, leading to an upward revision of our overall forecast excluding China. Due to the strong recovery, except China, global steel demand will return to the level before the epidemic this year, good performance graphite electrode detailed information. 

Table 1. Steel demand forecast

October 2021 SRO, finished steel

f - Predicted value

Association of Southeast Asian Nations (5 countries) : Indonesia, Malaysia, Philippines, Thailand, Vietnam

Table 2: Top 10 steel consuming countries in 2020

October 2021 SRO, finished steel

f - Predicted value

Prediction Background

01. China

From 2020 to early 2021, China's economy continued to recover strongly. However, since June this year, China's economy began to slow down. Since July, the steel industry has shown obvious signs of slowdown, with steel demand shrinking - 13.3% in July and - 18.3% in August. The sharp slowdown of the steel industry is partly due to the recent bad weather and the wavelet epidemic in summer. However, the main reasons are also include the slowdown of the construction industry and the government's restrictions on steel production. The weakening of the activity of the real estate industry is due to the measures launched by the Chinese government to strictly control the financing of developers in 2020. At the same time, due to the reduction of investment potential and the limited financing capacity of local governments, infrastructure investment did not rise in 2021. In addition, the strong recovery of the global manufacturing industry also weakened export market.

Due to last year's high base and the continuous slowdown of the real estate industry, China's steel demand will show negative growth in the rest of 2021. Therefore, although the apparent steel consumption from January to August increased by 2.7%, the overall steel demand in 2021 is expected to decline by - 1.0%.

According to the government's policy orientation of economic rebalancing and environmental protection, steel demand is hardly expected to grow in 2022. Some restocking is likely to support apparent steel consumption. It is highly likely that the government will continue to take measures to move away from the real estate-dependent growth model.

02. Developed Economies

In 2021, due to the more targeted and localized blockade measures, the impact of the recent epidemic on economic activities has been weakened. However, the bottleneck of the supply chain and the lag of the service industry are weakening the recovery.

In 2022, the recovery will be stronger as supply chain bottlenecks are reduced, pent-up demand continues to be unleashed, and business and consumer confidence improves.

Steel demand in developed economies will increase by 12.2% in 2021 and continue to increase by 4.3% in 2022, reaching the level before the epidemic, following a decline of - 12.7% in 2020.

In the United States, the economy will continue to recover steadily, driven by the unleashing of pent-up demand and a strong policy response. The real GDP level has exceeded the highest level in the second quarter of this year.

Although steel demand was once boosted by the strong performance of the automobile industry and durable goods industry, the shortage of some parts is undermining the recovery of steel demand. With the end of the rapid development stage of the residential industry and the weakness of the non residential construction industry, the growth momentum of the construction industry is gradually slowing down. The recovery of oil prices is supporting the recovery of investment in the energy industry.

If President Biden's infrastructure plan is approved, the upward potential will increase,  but the effects won't be felt until late 2022.

In the European Union, despite several waves of epidemic, all steel industries have shown a positive recovery trend; with the recovery of steel industry, the recovery trend of steel demand starting in the second half of 2020 is also gradually accelerating.

The recovery of steel demand in Germany is supported by exports, which makes the country's manufacturing industry perform strongly. However, due to the bottleneck of the supply chain, especially the bottleneck of the automobile industry, the recovery momentum of steel demand is weakened. Due to the large backlog of orders in the manufacturing industry and the continuous growth of the construction industry after experiencing a relatively high growth rate during the epidemic, steel demand will benefit in 2022.

Italy, which was hit hardest by the outbreak in the European Union, at present, the recovery speed of Italy is faster than that of other EU countries, and the recovery of construction industry is strong. Several steel industries such as construction industry and household appliances industry are expected to return to the level before the epidemic in 2021.

In the developed regions of Asia, the situation of COVID-19 slowed down in 2021 due to the slow pace of vaccination. However, the demand for steel did not interrupt the recovery process, and the related forecast results had been raised with the help of strong rebound in global trade and government infrastructure investment.

In Japan, with the increase of export, investment and consumption, steel demand is also gradually recovering. The manufacturing industry, especially automobile manufacturing and machinery manufacturing, is leading this recovery. The civil construction industry continues to support steel demand, but the private construction industry is still suppressed, with the exception of warehouses and distribution centers. All steel industries are expected to show positive growth in 2022, supported by a recovery in consumption and investment.

In South Korea, supported by improved exports and increased investment in manufacturing facilities, it is expected that South Korea's steel demand will return to the 2019 level in 2021. The construction industry will be supported by the recovery of public civil engineering plans and housing construction industry, and return to positive growth in 2021/2022. A sudden increase in new shipbuilding orders from South Korea in 2021 will drive steel demand for years to come, more news of steel industry contact us.