Global steel demand to rebound by 2.3% this year

The World Steel Association (worldsteel) expects steel demand to rebound by 2.3% this year to reach more than 1.82-billion tonnes. 

In its Short Range Outlook (SRO) for steel demand for 2023 and 2024, released on April 18, worldsteel notes that global steel demand is likely to grow by 1.7% next year to reach more than 1.85-billion tonnes.  

Moreover, manufacturing is expected to lead the recovery, but high interest rates will continue to weigh on steel demand.  

Next year, growth is expected to accelerate in most regions, but deceleration is expected in China. 

“In 2022, recovery momentum after the pandemic shock was hampered by high inflation and increasing interest rates, Russia’s invasion of Ukraine and the lockdowns in China. As a result, steel-using sectors’ activity went down in the last quarter of 2022.  

“This, combined with the effect of stock adjustments, led to a worse than expected contraction in steel demand,” worldsteel economics committee chair and steel manufacturer Ternium CEO Máximo Vedoya said. 

He added that persistent inflation and high interest rates in most economies would limit the recovery of steel demand this year, despite positive factors such as China’s reopening, Europe’s resilience in the face of the energy crisis and the easing of supply chain bottlenecks.  

He said demand growth next year would be driven by regions outside of China but the rate of demand faces global deceleration owing to China’s expected 0% growth, overshadowing the improved environment. Sustained inflation also remains a downside risk, potentially keeping interest rates high. 

“As China’s population declines and moves to consumption-driven growth, its contribution to global steel demand growth will lessen. Future global steel demand growth will rely on reduced drivers, primarily concentrated in Asia.  

“Investments in decarbonisation and dynamic emerging economies will increasingly drive positive momentum for global steel demand, even as China’s contribution to global growth diminishes,” Vedoya explained. 

Chinese steel demand contracted in both 2021 and 2022 as the Chinese economy decelerated sharply owing to unexpected lockdowns that extended across the country. 

After declining by 3.5% in 2022, China’s total steel demand is expected to grow by 2% this year, while remaining flat next year. 

Meanwhile, steel demand in developed economies globally suffered a sizable contraction last year because of monetary tightening and high energy costs. After falling by 6.2% in 2022, it is expected to increase by 1.3% this year, while next year, a recovery of 3.2% is expected. 

Worldsteel said steel demand dynamics in emerging and developing economies – excluding China – are diverging, with developing Asia showing more resilience than elsewhere. After falling by 0.3% last year, steel demand in emerging and developing economies will show growth of 3.6% this year and 3.9% next year.