Page 41 - Steel Tech India eMagazine Volume April 2022

VOL. 16 • NO. 3 • April 2022

Advanced economies In developed Asia, Japanese steel demand increased
by 12.3% in 2021 after falling by 10.4% in 2020, due to
Despite the cOVID waves and some supply chain the National Resilience Programme and a recovery in
issues in the manufacturing sector, steel demand in the exports. Steel demand is expected to continue with a
eU and the US recovered strongly in 2021. however, moderate recovery in 2022 and 2023. construction will
the outlook for 2022 has weakened due to inflationary be backed by strong public investments and demand
pressure, which is further reinforced by the events
surrounding Ukraine. for logistics facilities and data centres, while supply
constraints and rising resource and energy costs
the impact of the war is expected to be larger in the will continue to exert a negative impact. Automobile
eU due to its close trade and energy links with Russia. production will see a recovery, as supply constraints
Russia is the fifth-largest trade partner of the eU, are expected to improve from the previous year,
accounting for 5.8% of the eU’s total trade in 2021. even though they may not be resolved entirely. In the
energy takes the lion’s share of the eU’s imports from industrial machinery sector, both external and domestic
Russia: about 45% of the eU’s 14.04.2022 | worldsteel demand are expected to continue to support its growth,
Short Range Outlook April 2022 Appendix gas imports benefiting from expanding infrastructure and capital
and 25% of oil imports come from Russia. Italy and investment.
Germany appear most vulnerable among major
eU countries, as their dependence on Russian gas South Korea’s steel demand suffered only mildly from the
exceeds 45% of gas consumption. pandemic and experienced a sound recovery in 2020-
21, backed by solid export performance and corporate
the war in Ukraine will further delay the manufacturing investment, despite contracting construction activity.
sector’s recovery from the shortage of semiconductors, the strong cOVID wave in the first quarter of 2022 did
with the automotive industry the most vulnerable sector. not seem to impact economic activities seriously. Only
construction activities will be affected by high materials moderate growth in steel demand is expected In 2022
costs. As a result, the eU’s steel demand in 2022 is and 2023 due to limited growth in automotive, despite
expected to contract slightly, a substantial downward improving demand from construction and shipbuilding.
revision from worldsteel’s October 2021 SRO. In 2023,
we expect the situation to stabilise, and accelerating Developing economies excluding China
investment in the energy transition will provide some In the developing economies, recovery from the
positive momentum for steel demand in the region. pandemic faced more challenges due to lower rates of
the situation in the US is different as it is relatively cOVID vaccination, continued virus waves, and surging
insulated from the direct economic impact of the war in inflation, which prompted a monetary tightening cycle in
Ukraine. It is expected that the economy will maintain many emerging economies.
strong momentum although high inflation is a concern, India
with cPI approaching 8% in February 2022, the highest
since the early ‘80s. the third wave of cOVID-19 in early 2022 was short-
lived and did not greatly affect economic activities;
Steel demand recovered strongly in 2021 due to strong India’s quarterly GDP touched pre-cOVID levels in Q4
multi-unit residential construction and durable goods. 2021, and growth is expected to normalise gradually,
however, auto production increased only modestly supported by the government’s push for investment
because of supply chain bottlenecks. the recovery and healthy recovery in services. however, the
is expected to continue in 2022 and 2023, albeit at a manufacturing sector slowed down as high inflation
slower rate, reflecting the high base effect and monetary affected consumer sentiment and investment.
policy tightening to tackle inflation. Steel demand will be
supported by a recovery in non-residential construction, In 2022, construction and manufacturing will likely be
auto production, and investment in the energy sector as supported by spending on infrastructure and a gradual
well as capital investment projects as a consequence revival in automotive production, with an expected
of the infrastructure bill. however, surging oil prices improvement in semiconductor supply. expected raw
and volatile financial markets pose downside risks to material supply constraints in the international market
the outlook. will result in higher domestic mining output and support

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