Worldsteel sees steady demand

The Brussels-based World Steel Association (Worldsteel) is forecasting a 2.3 percent rebound in global steel demand this year followed by another 1.7 percent increase in 2024.

In its most recent Short Range Outlook (SRO), released this April, the organization predicts about 1.822 million metric tons of steel demand globally this year, rising to 1.854 million metric tons next year.

“Manufacturing is expected to lead the recovery, but high interest rates will continue to weigh on steel demand,” Worldsteel states. In 2024, the group predicts that “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, the Russian invasion of Ukraine, and the lockdowns in China,” says Máximo Vedoya, CEO of steel producer Ternium, who also serves as chair of the Worldsteel Economics Committee.

“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 worse than expected contraction in steel demand," he adds. 

The committee cites as positive factors China’s reopening, Europe’s resilience in the face of the energy crisis, and the easing of supply chain bottlenecks. “In 2024, demand growth is driven by regions outside China but faces global deceleration due to China’s anticipated zero percent growth, overshadowing the improved environment,” Worldsteel says.

Recycled-content steel could benefit from another trend identified by the group. “Investments in decarbonization and dynamic emerging economies will increasingly drive positive momentum for global steel demand, even as China’s contribution to global growth diminishes,” the organization says.

In the United States, Worldsteel says the “strong postpandemic rebound of the U.S. economy has run its course with the Fed’s steep interest rate hikes to tackle inflation. Growth in 2023-2024 is expected to be subdued by recessionary pressure.”

The organization also says, “U.S. manufacturing sector activity has slowed from the strong postlockdown rebound. Rising car prices, high gasoline prices and interest rates have put downward pressure on U.S. auto sales, and U.S. light vehicle sales went down by a further 8 percent in 2022.”

However, the group adds, vehicle sales are expected to recover by 8 percent in 2023 and an additional 7 percent in 2024. After a fall of 2.6 percent in 2022, steel demand in the U.S. is expected to grow by 1.3 percent in 2023 and then by 2.5 percent in 2024, according to Worldsteel.

Of interest to East Coast scrap exporters, Worldsteel predicts, “Considering the base effect and the rebuilding and reinforcing efforts in high earthquake-risk areas, the construction sector is expected to grow by 15 percent” in 2023.

In another key destination, India, the organization comments, “After growth of 8.2 percent in 2022, demand is expected to show healthy growth of 7.3 percent in 2023 and 6.2 percent in 2024.”