The World Steel Association predicts that global steel demand will grow by 0.4% in 2022 to reach 1,840.2 million tons after a 2.7% increase in 2021. In 2023, steel demand will show a further increase of 2.2% to 1,881.4 million tons. The association emphasizes that the current forecast was made against the backdrop of the war in Ukraine and has a high degree of uncertainty.
The global effects of the war in Ukraine, along with weak growth in China, point to lower expectations for growth in global steel demand in 2022. The expected tightening of US monetary policy will hurt financially vulnerable emerging markets.
The outlook for 2023 is dim, according to Maximo Vedoja, chairman of the Worldsteel Economic Committee. The association's forecast assumes that the confrontation in Ukraine will end during 2022, but sanctions against Russia will largely remain.
In addition, the geopolitical situation around Ukraine has serious long-term implications for the global steel industry. These include the possible adjustment of global trade flows, the changing energy trade and its impact on energy transitions, and the ongoing reconfiguration of global supply chains.
The total demand for steel in the Russian Federation, the CIS countries and Ukraine this year, according to Worldsteel forecasts, will fall by 23.6% - to 44.6 million tons. In 2023, demand in the region is expected to grow by 1.1%, to 45.1 million tons. At the same time, steel consumption in Russia will fall by 20%, to 35.1 million tons against 43.9 million tons in 2021.
Global construction activity, which continued to recover from lockdown restrictions and reached a record growth of 3.4% despite a slowdown in China in 2021, according to Worldsteel, will drive the growth of the construction sector for years to come. However, the construction sector is facing some hurdles due to rising costs and interest rates.
The recovery of the global auto industry in 2021 was disappointing as supply chain bottlenecks slowed down the pace of recovery in the second half of the year. A war in Ukraine is likely to delay any return to normal for supply chain problems, especially in Europe.
Despite the decline in global car production, the electric vehicle segment has grown exponentially during the pandemic. Global EV sales reached 6.6 million units in 2021, almost doubling from 2020. The share of electric vehicles in total vehicle sales increased from 2.49% in 2019 to 8.57% in 2021.