World Steel Association SRO Predicts 2.4% Drop in Steel Demand

SEATTLE (Scrap Monster): The World Steel Association (worldsteel) published an update to its Short Range Outlook (SRO) for 2020 and 2021. The new report maintains more optimistic outlook, compared with the previous SRO released in the month of June this year. The projected decline for 2020 is lesser than before, the report says.

The Covid-19 pandemic is likely to result in contraction in global steel demand by 2.4% over the previous year to approximately 1.725 billion tonnes in 2020. The fall in global steel demand this year will be mitigated by a strong recovery in demand in China. The demand is expected to recover by 4.1% year-on-year to 1.795 billion tonnes in the following year.

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The strong rebound of economic activities since mid-May this year, after the pandemic-related shutdown, suggests v-shaped recovery. However, this has not been enough to compensate for the huge drop in demand during the lockdown period. Many steel consuming sectors, including construction and automotive sectors have not yet retraced the pre-Covid-19 levels.

Al Remeithi, Chairman of the worldsteel Economics Committee noted that the global steel industry passed the lowest demand point for this year in April and has been showing signs of recovery since mid-May this year. The trade body hopes that nationwide lockdowns will not be repeated to contain the second wave of the pandemic, he added.