Worldsteel predicts recovery of global steel demand in 2023 by 2.3%

In 2023, the world demand for steel will increase by 2.4% compared to 2022 – up to 1.822 billion tons. This assessment was given in its short-term forecast of World Steel Association (WSA).

In 2024, according to the association’s expectations, global demand for steel will increase by 1.7% y/y – up to 1.854 billion tons.

“In 2022, the pace of recovery after the shock caused by the pandemic was complicated by high inflation and interest rate increases, the invasion of the Russian Federation in Ukraine, and quarantine restrictions in China. As a result, in the 4th quarter of 2022, the activity of steel-consuming sectors decreased. This, combined with the effect of inventory adjustments, led to a larger than expected reduction in steel demand,” said Ternium CEO and Worldsteel Economic Committee Chairman Maximo Vedoya.

High inflation and interest rates in most countries will limit the recovery of steel demand in 2023, despite positive factors, in particular, the lifting of restrictions in China, the resilience of Europe in the face of the energy crisis and the resolution of logistics issues.

In 2024, demand will grow thanks to regions outside of China, but will face a global slowdown due to the expected stagnation of the PRC economy. Sustained inflation remains a downside risk to demand and will potentially keep key rates high.

Demand for steel in EU countries and the UK in 2023, according to WSA forecasts, will amount to 151.3 million tons, which is 0.4% below the level of 2022. In 2024, it will grow by 5.6% – up to 159.8 million tons.

In countries USMCA (USA, Mexico, Canada) in 2023 demand is expected to grow by 1.6% y/y – up to 135 million tons, and in 2024 – by 2.3% y/y, up to 38.1 million tons. In Middle East countries – by 2.2% y/y in 2023, up to 52.4 million tons, and by 3.2% – in 2024, up to 54.1 million tons.

General demand for steel in the Russian Federation, the CIS and Ukraine in the current year will fall by 3.5% – to 51.5 million tons. In 2024, a decrease of 4.3% y/y is expected – to 49.3 million tons.

At the same time, in 2022, the demand for steel in the Russian Federation decreased less than expected due to pipeline projects and housing construction. At the same time, production, which depends on imported parts, has significantly decreased.

In 2023-2024, the rate of growth in the construction sector is expected to slow down, and in 2024, the reduction in demand for steel in the Russian Federation will accelerate. In the coming years, the Russian economy will face serious problems due to Western sanctions and the outflow of labor.

“The continuation of the hot phase of the war beyond expectations is delaying the expected recovery in Ukraine. The demand for steel in Ukraine is currently 40% of the pre-war level, and the restoration of the pre-war level will probably take a considerable time,” the association states.

As GMK Center reported earlier, the WSA had previously expected growing global demand for steel in 2023 at the level of 1% – to 1.814 billion tons. In 2022, according to the association’s forecasts, the indicator fell by 2.3% y/y – to 1.796 billion tons.