Asian steelmakers are expecting steel demand to recover from effects of the Covid-19 pandemic in 2021, although recovery rates could be sluggish in some regions, according to panelists at Fastmarkets Steel Success Strategies online conference last week.
Vinay Shroff, the executive vice president of sales and marketing for India’s JSW Steel, said a series of proposed investments in infrastructure projects will boost steel demand in the South Asian steelmakers country.
“[Investments amounting to $1.5 trillion are likely to be made in the next five years, especially in the energy and transportation sectors,” he said.
These include:
- The $150-billion Bharatmala program, which will use about 2-3 million tonnes of steel to build a network of highways, expressways and bridges in the next five years in India. Phase 1 of the program covers over 34,800km of road infrastructure.
- The $30-billion Sagarmala program, which will connect and develop ports, and establish transportation links between the coasts and inland territories.
- The $15-billion high-speed rail corridor, which will use about 1.7 million tonnes of steel to connect Ahmedabad and Mumbai. The first bullet train is expected to start running in 2023.
*** Hyundai Steel
Hee Seog Yang, the vice president of marketing for South Korea’s Hyundai Steel, expects automotive production in the East Asian steelmakers country to increase by just 0.7% to 3.92 million vehicles by 2025 compared with 2019.
While South Korea is forecast to produce just 3.43 million vehicles this year due to the Covid-19 pandemic affecting consumer demand, output could rise by 6.8% on the year in 2021 to 3.67 million units, before experiencing small yearly increments until 2025, he said.
Cold-rolled coil demand is expected to follow, recovering from 13.97 million tonnes in 2020 to some 15 million tonnes in 2025. But this is just 97% of the demand seen in the 2010 peak demand year of 15.4 million tonnes, Hee said.
As a Asian steelmakers ,Investments in South Korea’s construction sector is expected to grow at an annual average rate of 0.8% between 2020 and 2025, with small yearly increases forecast for residential, non-residential and civil works, he added.
Hyundai Steel expects construction investments to hit 276 trillion Won ($244 billion) by 2025.
*** JFE Steel as an Asian steelmakers
JFE Steel principal Mike Fujisawa noted that countries such as the steelmaker’s native Japan, as well as India, the Americas, Europe and the Middle East are still experiencing negative gross domestic product growth, and that only China was bucking the trend.
“Japan’s steel usage is expected to decrease by 19.6% to 50.8 million tonnes in 2020,” Fujisawa said.
But steel demand in the country is expected to increase by 8.1% to 54.9 million tonnes in 2021, he said.
Japanese industrial production rates have fallen this year due to the Covid-19 pandemic, with the automotive and machinery sectors hit especially hard, he added.
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