India’s Steel Demand Likely To Fall 18% In 2020: Worldsteel
India’s steel demand is likely to face a sharp decline of 18% in 2020, while global steel demand is expected to contract 6.4% to 1,654 million tonnes due to the Covid-19 crisis, according to the World Steel Association.
According to official figures, India consumed more than 100 million tonnes steel during 2019.
“In 2020, Worldsteel forecasts that steel demand will contract by 6.4%, dropping to 1,654 million tonnes due to the Covid-19 crisis,” the industry body Worldsteel said in its latest Short Range Outlook, a publication on steel demand scenario.
Steel demand in developed economies is expected to decline by 17.1% in 2020.
Although the downturn is led by consumer and service sectors, massive dislocations in spending, labour markets, and confidence are fueling declines in steel-using sectors, the global body said.
“While, the steel demand in the developing economies, excluding China is expected to fall by 11.6% in 2020. India is likely to face an 18% decline in steel demand in 2020, which will rebound by 15% in 2021,” it said.
In India, it said, the government implemented the world’s most stringent lockdown, bringing industrial operations to a standstill. Construction activity was halted entirely at the end of March, and recovery is expected to remain subdued due to the slow migration of workers.
Further, supply chain disruptions coupled with slower demand recovery will hit the steel-using industries like the automotive and machinery sectors.
On demand recovery, Worldsteel said global steel demand is expected to recover by 3.8% to 1,717 million tonnes in 2021.
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 government’s support to rural income, as well as expected consumption related to the upcoming festive season, will help in substantial recovery of demand for consumption-driven manufacturing goods in the second half, it said.
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% in 2021, it said.