Steel short-term outlook November 2022

The steel market must brace for more pain in the offing due to global macro headwinds, rising lockdown stringency in China and curbs on government spending in mature economies. Mature economies, including China, will drive demand decline, whereas India will buck this trend, growing 9% year-on-year. Chinese property sector continues to roll under declining sales and construction starts. Rising COVID lockdowns will further aggravate the grim situation, overriding the growth intensity from infrastructure and automotive. We expect a gradual recovery in 2023 with green shoots emerging from frontloading of Chinese infrastructure investments, a rise in automotive production amid easing chip shortages and healthy growth in emerging economies such as India and Southeast Asia. The longevity of the Russia/Ukraine war, lockdowns in China, and an impending recession in mature economies pose a downside risk to our forecast.