India’s steel demand is likely to face a sharp decline of 18 per cent in 2020, while global steel demand is expected to contract 6.4 per cent to 1,654 million tonnes (mt) because of the Covid-19 crisis, according to the World Steel Association.

According to official figures, India consumed over 100mt steel during 2019.

“In 2020, worldsteel forecasts that steel demand will contract by 6.4 per cent, dropping to 1,654mt due to the Covid-19 crisis,” the World Steel Association (worldsteel) said in its latest Short Range Outlook (SRO), a publication on steel demand scenario.

Steel demand in developed economies is expected to decline 17 per cent in 2020.

Although the downturn is led by consumer and service sectors, massive dislocations in spending, labour markets, and confidence are fuelling declines in steel-using sectors, the global body said.

“The steel demand in the developing economies, excluding China, is expected to fall 11.6 per cent in 2020. India is likely to face an 18 per cent decline in steel demand in 2020, which will rebound by 15 per cent in 2021,” it added.

In India, it said, the government implemented the most stringent nationwide lockdown measures in the world, bringing industrial operations to a standstill. Construction activity was halted entirely at the end of March, and recovery is expected to remain subdued because of the slow migration of labourers.

Supply chain disruptions along with slower demand recovery will hit the steel-using industries such as the automotive and machinery sectors.

On demand recovery, worldsteel said global steel demand is expected to recover by 3.8 per cent to 1,717mt in 2021. The reduction in global steel demand will be mitigated by an expected faster recovery in China than the rest of the world.