The coronavirus-related decline in global steel demand this year will be less than expected at 2.4% after a buoyant recovery in China, the World Steel Association (WSA) said on Thursday.
The industry group made a downward revision to its June forecast of a 6.4% decline this year after heavy stimulus spending in China lifted steel consumption for construction and infrastructure.
A global recovery in steel demand next year is still on the cards, based on the view that a second wave of COVID-19 infections will only have a limited impact on industrial production, the association said.
"China has been very robust in economic recovery and also robust in steel demand," WSA Director General Edwin Basson said in an online presentation.
"The global pandemic will have - if you look at the two years 2020 and 2021 - a short, sharp V (shaped) effect on steel demand, with most of the downward impact in the first part of 2020."
After a decline in crude steel demand to 1.725 billion tonnes this year, the group of producers that accounts for about 85% of global steel output forecast a 4.1% rebound to 1.795 billion tonnes in 2021.
The picture has been uneven, with steel demand expected to climb by 8% this year in China while sliding by 14.9% in other developed economies. China accounts for 57% of global steel consumption.
While the automotive industry recovers slowly from the coronavirus crisis, other steel-consuming industrial sectors have fared better, Basson said, adding that this is expected to persist in the coming months as governments seek to avoid full-scale lockdowns.
The JP Morgan global manufacturing purchasing managers index, indicating the extent of recovery in manufacturing, rose to a 25-month high in September