Page 27 - Steel Tech India eMagazine Volume January 2023

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worldsteel Short Range Outlook October 2022 supplies and intervened with the normalisation of supply
chains. In particular in Europe, where dependence on
The World Steel Association (worldsteel) has released
an update of its Short Range Outlook (SRO) for 2022 Russian gas supply is high, economic activities, as well
and 2023. worldsteel forecasts that steel demand will DV FRQ¿GHQFH DUH KHDYLO\ DႇHFWHG E\ WKH HQHUJ\ FULVLV
contract by 2.3% in 2022 to reach 1,796.7 Mt after The Fed’s aggressive interest rate hikes and strong
increasing by 2.8% in 2021. In 2023 steel demand will US dollar are propelling recession risks in the US
see a recovery of 1.0% to reach 1,814.7 Mt. The current DQG ZLOO KDYH D ULSSOH HႇHFW IRU WKH UHVW RI WKH ZRUOG
forecast represents a downward revision over the earlier WKURXJK FDSLWDO RXWÀRZV LQ WKH HPHUJLQJ HFRQRPLHV
IRUHFDVW UHÀHFWLQJ WKH UHSHUFXVVLRQ RI SHUVLVWHQWO\ KLJK LQFUHDVLQJ WKH ¿QDQFLDO VWUHVV RI LQGHEWHG FRXQWULHV
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monetary tightening, and China’s slowdown contributed ZLOO DႇHFW LQYHVWPHQW DQG FRQVXPHU VSHQGLQJ DQG
WR D GLႈFXOW EXW LQIUDVWUXFWXUH GHPDQG LV H[SHFWHG will hurt steel-intensive sectors such as construction,
to lift 2023 steel demand slightly. machinery, and consumer durables.
Commenting on the outlook, Mr. Máximo Vedoya, CEO Supply chain problems eased somewhat in 2022, but
of Ternium, and Chairman of the worldsteel Economics continued to constrain production activities as new
&RPPLWWHH VDLG ³WKH JOREDO HFRQRP\ LV DႇHFWHG E\ disruptions have emerged. Assuming that the war will
SHUVLVWLQJ LQÀDWLRQ 86 PRQHWDU\ WLJKWHQLQJ &KLQD¶V not end soon and China continues to maintain its strict
economic deceleration, and the consequences of COVID containment policy for the time being, supply
Russia’s invasion of Ukraine. High energy prices, bottlenecks will not dissipate completely, despite
ULVLQJ LQWHUHVW UDWHV DQG IDOOLQJ FRQ¿GHQFH KDYH OHG WR slowing demand.
a slowing in steel using sectors’ activities. As a result,
our current forecast for global steel demand growth has Uncertainty remains elevated for the global economy
been revised down compared to the previous one. The and the balance of risks is largely skewed to the
prospect for 2023 depends on the impact of tightening GRZQVLGH $PRQJ WKRVH DUH WKH HႇHFW RI PRQHWDU\
monetary policies and central banks’ ability to anchor WLJKWHQLQJ FRQWLQXDWLRQ RI LQÀDWLRQ WKH GLUHFWLRQ RI WKH
LQÀDWLRQ H[SHFWDWLRQV 3DUWLFXODUO\ WKH (8 RXWORRN LV Chinese economy and its COVID policy, the potential
VXEMHFW WR IXUWKHU GRZQVLGH ULVN GXH WR WKH KLJK LQÀDWLRQ crisis of gas supply in Europe, and the aggravation of the
and the energy crisis that have been exacerbated by Russian-Ukraine war with unexpected consequences.
the Russia-Ukraine war.” Despite global headwinds, India’s steel demand
General will show high growth on the back of strong urban
consumption and infrastructure spending, which will
The global economic environment has deteriorated also drive demand for capital goods and automobiles
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along with other major headwinds, namely the Russia- among other things.
Ukraine war and China’s lockdowns. The Russia- In India, a strong push for infrastructure, including roads
8NUDLQH ZDU H[DFHUEDWHG WKH LQÀDWLRQDU\ SUHVVXUH WKDW and metro projects, will continue to drive steel demand.
was ignited by the post-lockdown supply and demand Urban infrastructure development will also drive the
imbalances as the war disrupted energy and food residential sector’s recovery.

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