Page 40 - Steel Tech India eMagazine Volume April 2022

VOL. 16 • NO. 3 • April 2022

WORLDSTEEL SHORT RANGE OUTLOOK APRIL and rising interest rates. the expected tightening of
2022 US monetary policies will hurt financially vulnerable
emerging economies.
the Worldsteel Association (worldsteel) released
its Short Range Outlook (SRO) for 2022 and 2023. the outlook for 2023 is highly uncertain. Our forecast
worldsteel forecasts that steel demand will grow by assumes that the confrontation in Ukraine will come to
0.4% in 2022 to reach 1,840.2 Mt after increasing by an end in the course of 2022 but that the sanctions on
2.7% in 2021. In 2023 steel demand will see further Russia will largely remain.
growth of 2.2% to reach 1,881.4 Mt. the current
forecast is made against the backdrop of the war in APPENDIX
Ukraine and is subject to high uncertainty. China

Inflation and uncertainty cloud the outlook for steel the 2021 first half recovery in china’s steel demand
demand slowed down sharply in the second half as the real estate
commenting on the outlook, Mr MáximoVedoya, market weakened due to tough government measures
chairman of the worldsteel economics committee, on developers’ financing. Infrastructure investment
said, “this Short Range Outlook is issued in the also failed to recover due to local government financing
shadow of the human and economic tragedy following constraints. From August 2021 the manufacturing
the Russian invasion of Ukraine. We all wish for as sector slowed down, though exports supported some
rapid and peaceful an end to this war as possible. sectors like machinery and automotive. Shipbuilding
In 2021, recovery from the pandemic shock turned out and container production remained firm amid the
to be stronger than expected in many regions, despite backdrop of global shipping congestion. As a result,
continuing supply chain issues and cOVID waves. despite a strong rebound of 12.0% in steel demand
however, a sharper than anticipated deceleration in in the early part of 2021, demand in the second half
china led to lower global steel demand growth in 2021. contracted by 18.5%, leading to an overall decline of
For 2022 and 2023, the outlook is highly uncertain. the 5.4% for the year.
expectation of a continued and stable recovery from In 2022, stimulus measures focused on infrastructure
the pandemic has been shaken by the war in Ukraine
and rising inflation.” projects are expected to have a positive impact on steel
demand and the real estate sector may improve later in
General 2022. china’s manufacturing exports remained strong
the magnitude of the impact of this conflict will vary in 2021, but are expected to weaken slightly following
across regions, depending on their direct trade and the recovery in supply chain bottlenecks abroad.
financial exposure to Russia and Ukraine. there Overall steel demand is expected to remain flat in 2022.
is an immediate devastating effect on Ukraine, In 2023, the carryover of the stimulus effect from 2022
consequences for Russia, and major impact on the will support steel demand, but this will be balanced by
eU due to its reliance on Russian energy and its environmental pressure. china’s steel demand in 2023
geographic proximity to the conflict area. the impact will is expected to increase slightly by 1.0%.
also be felt globally via higher energy and commodity
prices – especially raw materials for steel production With inflation within a reasonable range and low
– and continued supply chain disruptions, which were trade dependence with Russia, the impact of the war
troubling the global steel industry even before the war. in Ukraine will be limited, but the weakening global
Furthermore, financial market volatility and heightened economic outlook may undermine china’s exports.
uncertainty will undermine investment. continued and expanding outbreaks of the cOVID

Such global spill overs from the war in Ukraine, along virus and local lockdowns also constitute a downside
with low growth in china, point to reduced growth risk. however, if the impact of external factors weighs
expectations for global steel demand in 2022. there are too heavily on economic performance, the stimulus
further downside risks from the continued surge in virus measures could be scaled up to result in stronger
infections in some parts of the world, especially china, demand for steel.

38 Steel tech