Global Demand For Steel

Introduction

To understand a vast topic such as the global demand for steel, everybody relies on the information, data, and predictions of international organizations like the World Steel Association aka Worldsteel. Earlier this year, Worldsteel released its SRO i.e. the Short Range Outlook for 2021-2022.

Predictions

It is predicted by the aforementioned SRO and confirmed by a leading steel trading company, Aastha Minmet India that the Global Steel demand to increase by 5.8% in 2021, amounting to around 1.87 billion tonnes. Due to Covi-19, the steel demand had reduced by 0.2% in 2020 globally. It is further predicted that in 2022, the demand will see a growth of 2.7%, amounting to a total of 1.92 billion tonnes.

Assumptions and uncertainty

The abovementioned data is based on the assumption that the impact of the second and third waves will abate by the second quarter. That the vaccination drive worldwide will run smoothly and things will gradually return to normal in the steel-producing and steel-using nations. So far, their predictions seem to be accurate.

Indian Steel Industry

Outlook for India seems bright, India overtook Japan by 4.9% in terms of growth and became the second-largest steel producer in the world after China. The SRO by Worldsteel had even predicted that India would become the world’s second-largest steel consumer by the end of 2019, unfortunately, the Covid-19 induced damage took a toll on this possibility.

Policy Support by Government

The Union Budget of 2021-2022, allocated a total of Rs. 39.25 Crores to the Ministry of Steel. The National Steel Policy that was implemented in 2017 is spearheading the structural changes in the Steel Market/Industry of India to meet the global benchmark and demand. Strong and supportive governance is the dire need of the Indian economy, says a spokesperson of Aastha Minmet India.

India also has a competitive advantage as the availability of manpower at a low cost and the presence of abundant iron ore reserves make India one of the leading competitors in the global market.

Conclusion

The only way forward, it seems is structural changes to bring about a shift in steel demand shape. The global economy is expected to witness a boom and so will certain fundamentals in the dynamics of the market of steel. From infrastructural initiatives, rapid developments through digitalization, automation to energy transformation. The last point is particularly important because of the recently published IPCC report on the climate. The structure of the steel industry needs to shift to producing carbon-low steel urgently.