Global Steel Strategic Planning Outlook – Q1 2023
Steel will witness a tale of two halves in 2023 as the macro headwinds are still at play. We expect the H2 2023 to fare better as Chinese demand garners momentum, inflation and credit policy eases, and supply chain pressures retract. Chinese consumption will inch towards recovery, led by a gradual rise in property investments, pent-up consumer spending and a robust infrastructure pipeline. We have revised our near-term outlook slightly downward as the government-led stimulus is weaning due to rising public debt and inflation-linked spending cuts. We believe energy and supply chain challenges will take time to resolve. Over the long term, China will be a major deterrent. Global growth will piggyback on strong demand momentum from emerging economies like India and Southeast Asia. The steel supply mix is in for an overhaul as decarbonisation initiatives intensify. A switch over to low-carbon steelmaking will elevate the production share of EAF from 27% in 2022 to 48% by 2050.