Posted on 08 Dec 2020
The global outlook for the steel industry is improving as recovery in key end-markets, such as automotive, manufacturing, construction and infrastructure, and some consolidation in major steel markets increase capacity utilisation and support margins in 2021, Fitch Ratings says.
Chinese steel companies, many of which are state-owned enterprises, have ramped up steel production to a forecast all-time high of 980 million tonnes (mt) in 2020 and 2021 (up by 72mt from 2019) as fiscal stimulus measures support infrastructure investment while an accommodative monetary policy promotes real-estate investment.
In the rest of the world, economic stimulus measures were more moderate and steel production lower by more than 100mt at an estimated output of 745mt in 2020. We expect activity to reach pre-pandemic levels towards end-2022 outside of China, with a forecast output of 815mt in 2021. The approval and deployment of vaccines against COVID-19 in Europe and North America, where the pandemic continues to disrupt society and many steel companies have been challenged by high cost bases and overcapacity, should reduce downside risks from demand forecast.
Source:Fitch Ratings
