Global steel demand will fall 2.3% this year due to rising inflation and rising interest rates, the World Steel Association (WSA) said on Wednesday, downgrading its recent positive outlook.
The statement said the industry group revised its April forecast that steel consumption increased by 0.4% in 2022 after deteriorating economic conditions, including a slowdown in China.
Global recovery in steel demand next year is still expected, mainly due to rising infrastructure spending, but growth of 1% instead of 2.2% as forecast earlier this year, the WSA said.
Currently, it is expected that that steel demand will fall to 1.797 billion tonnes in 2022 as the sector continues to be under pressure from logistical constraints across the supply chain.
“2022 could have been the worst year, and 2023 could look better,” — WSA CEO Edwin Bass said it's in an online presentation. “We are seeing very, very strong drivers starting to pile up, indicating growth in infrastructure.”
Pandemic supply bottlenecks have begun to ease, but the war in Ukraine and China’s strict policy to contain the spread of COVID -19 means they are still a problem, the WSA said in a statement.
Steel demand in China, which accounts for 51% of global consumption, is forecast to fall by 4% in 2022 and not will change next year.
The automotive sector, which began to grow in the first half of 2022, when production recovered, is facing rising interest rates that make cars less affordable and may contain this growth, the WSA said.