Steel short-term outlook December 2022

It has been a topsy-turvy year for steel, with detractors overpowering growth drivers. The Chinese economy was marred by a downturn in property sector and strict Covid lockdowns across major consumption pockets. Globally, consumer spending nosedived, and government budget cuts due to rising cost inflation and hikes in interest rates. The disruption in supply chains amid the ongoing Russia/Ukraine war is yet to be restored to normalcy. It would not be a stretch to assume that these headwinds will take time to retract. The first half of 2023 would continue to reel under a gloomy macro-outlook. Therefore, we have revised down our 2023 growth forecast. Green shoots are emerging across regional pockets, leading to a slow and gradual recovery in 2023. The role of government will be critical in supporting steel consumption; for example, policy interventions in China, resolving the Russia/Ukraine war, taming inflation and budgetary allocations to construction would be the key growth drivers.