In 2022, global steel consumption may be reduced by 65 million tons, according to Fitch Ratings analysts. In their December forecast, they stated that the load of steel enterprises in the whole world will fall from 80% to 77%. The target reduction in steel production in China will be about 30 million tons of this volume, the rest will come from a decrease in demand outside China.
“In 2023, the global steel sector will not be able to fully recover from the shift in demand /supply in favor markets driven by reduced consumption in 2H 2022.
We expect steel producers to see a significant decline in revenues as the slowdown in global economic growth ended a period of exceptionally high prices supported by pent-up demand in the wake of the pandemic. Steel markets will normalize in 2023, and volumes will be broadly similar to 2021 levels (with the exception of China).
The greatest uncertainty in 2023 is expected in the PRC and EU markets. The outlook for Europe looks bleakest due to high volatile energy prices and the need to reorganize supply chains. In North America, India, Turkey and Brazil, the situation looks more predictable due to protectionist trade measures, price advantages in a number of markets and government support for infrastructure projects,” Fitch said.
Fitch expects 2023 India, Southeast Asia and the United States will show the most dynamic growth this year, exceeding the manageable decline in China by 25-35 million tons.