New Delhi: India’s steel demand is likely to face a sharp decline of 18 per cent in 2020. On the other hand global steel demand is expected to contract 6.4 per cent to 1,654 million tonnes (MT). This is due to the outbreak of COVID-19 crisis, industry body ‘World Steel Association’ (worldsteel) said Sunday. The steel demand will however, recover in 2021
Official figures
According to official figures, India consumed over 100 MT steel during 2019. “In 2020, ‘worldsteel’ forecasts that steel demand will contract by 6.4 per cent, dropping to 1,654 MT due to the COVID-19 crisis,” ‘worldsteel’ said. The report was published in its latest ‘Short Range Outlook’ (SRO), a publication on steel demand scenario. Steel demand in developed economies is expected to decline by 17.1 per cent in 2020, it added.
The downturn is led by consumer and service sectors. However, massive dislocations in spending, labour markets, and confidence are fuelling declines in steel-using sectors, ‘worldsteel’ said.
The steel demand in the developing economies excluding China is expected to fall by 11.6 per cent in 2020. India is likely to face an 18 per cent decline in steel demand in 2020. It however, rebound by 15 per cent in 2021,” ‘worldsteel’ said.
Stringent lockdown measures
In India the government implemented the most stringent nationwide lockdown measures in the world. It brought industrial operations to a standstill. Construction activity was halted entirely at the end of March. Recovery is expected to remain subdued due to the slow migration of labourers. Further, supply chain disruptions coupled with slower demand recovery will hit the steel-using industries. Among them are the automotive and machinery sectors,” the global body added.
On demand recovery, ‘worldsteel’ said global steel demand is expected to recover by 3.8 per cent to 1,717 MT in 2021.
Recovery rate
The reduction in global steel demand will be mitigated by an expected faster recovery in China than in the rest of the world. In India, the governments support to rural income will help in substantial recovery of demand. Also consumption related to the upcoming festive season, will help in boosting the steel industry, ‘worldsteel’ pointed out.
Supported by the government stimulus, recovery in construction will be led by infrastructure investment such as railways. The demand in India will rebound by 15 per cent in 2021, it said.
PTI