India likely to see deepest decline in Steel demand in decades: World Steel Association

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Biznextindia: India, the world’s 2nd largest steel producer, is likely to witness the deepest decline in steel demand in decades. However, a relatively fast recovery should take place in 2021, predicted World Steel Association(worldsteel) in its Short Range Outlook (SRO) for the steel industry for 2020 and 2021.

“India and Brazil have suffered most from a failure to effectively control the virus. India, where one of the most severe lockdowns in the world was implemented, is expected to see the deepest decline in steel demand in decades. However, a relatively fast recovery should take place in 2021, supported by rural consumption and government investment in infrastructure” said World Steel.

In 2020 worldsteel forecasts that steel demand will contract by -2.4%, dropping to 1,725.1 Mt due to the COVID-19 pandemic. In 2021 steel demand is expected to recover to 1,795.1 Mt, an increase of 4.1 % over 2020. A strong recovery in China will mitigate the reduction in global steel demand this year. The post lockdown recovery in steel demand in the rest of the world has been stronger than was earlier expected, but it still marks a deep contraction in 2020, both from developed and emerging economies, with only a partial recovery expected in 2021.

Meanwhile, steel demand in China, the world’s top steel producer is expected to increase by 8% in 2020, aided by government infrastructure stimulus and a strong property market. In 2021, steel demand is expected to stay flat as a result of the following two forces

“The global steel industry passed the lowest demand point for this year in April and has been recovering since mid-May. However, the recovery is uneven across countries depending on their success in containing the virus, the national industry structure, and finally economic support measures. China has shown a surprisingly resilient rebound contributing to a major upward revision of the global growth forecast for 2020. In the rest of the world, we will see a sharp contraction of steel demand, both in developed and developing economies. This crisis has been particularly challenging for developing economies as they continue to struggle with the uncontrolled virus, low commodity prices and falls in exports and tourism. The pandemic has accelerated megatrends which have been slowly transforming both our and our customers’ industries, leading to a lasting impact far greater than short term demand consequences” Mr Al Remeithi, Chairman of the worldsteel Economics Committee, said.

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