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Steel consumption expected to be lower in 2022

ArcelorMittal has offered an outlook of growth in global steel consumption in 2022 – but lower than that estimated for 2021. The review comes in its annual report, although it was drawn up before Russia attacked Ukraine.

Based on the current economic outlook, the steel giant expects global apparent steel consumption (asc) in 2022 to grow by up to only 1.0%, compared to growth of 4% in 2021.

‘Economic activity progressively improved during 2021 as lockdown measures eased and the global steel industry benefited from a favourable supply demand balance supporting increasing utilization and improved demand,’ it says. ‘Although there is some moderation of the tight market conditions (and subject to pandemic-related macroeconomic uncertainties), the company expects overall asc to grow in 2022 versus 2021 with regional differences.’

ArcelorMittal’s summary for the regions:

  • US: asc expected to grow within a range of 1.0% – 3.0% in 2022 versus an estimated 20.0% growth in 2021. Automotive is expected to grow strongly as semiconductor shortages ease and manufacturing sectors are supported by strong order backlogs and low inventory of finished goods.
  • Europe: growth within a range of 0.0% – 2.0% in 2022 (14.0% growth in 2021). Automotive is expected to grow strongly, with moderate growth in infrastructure and construction to support underlying demand.
  • Brazil: a decline in 2022 in the range of 8.0 – 10.0% (versus 23.0% growth in 2021). Real demand is expected to increase moderately in 2022 with a recovery in automotive output offset by weakness in other steel-consuming sectors.
  • CIS: Growth within a range of 0.0% to 2.0% (3.0% growth in 2021).
  • India: growth of 6.0% – 8.0% (17.0% growth in 2021).

As a result, overall world asc, apart from China, is expected to grow within the range of 2.5% to 3.0% in 2022 (11.0% in 2021). In China, overall demand is expected to continue to decline in 2022 between 0.0% to 2.0% (versus decline of 2.0% in 2021).

‘While the restocking effect has run its course with inventories returning to normal levels in 2021, the company expects real demand recovery to continue, and this is expected to support further apparent demand growth in 2022, particularly if the automotive supply chain constraints ease. The medium to longer term fundamental outlook for steel is positive.’

Scottish purchase
Meanwhile, ArcelorMittal added to its portfolio earlier in the month by acquiring Scottish recycling business John Lawrie Metals as part of the company’s strategy of increasing the use of scrap steel to lower CO2 emissions from steelmaking.

John Lawrie Metals, which is based in Aberdeen, with three other sites in northeast Scotland, is a consolidator of ferrous scrap metal and currently exports to steel producers mainly in western Europe.

‘We have identified strong potential for growth in the ferrous scrap processing business with demand growth in Europe facilitated by the European Union’s initiatives to achieve higher metal recycling rates, reduce CO2 emissions and underpin the EU’s net-zero ambitions,’ said Geert Van Poelvoorde, ceo of ArcelorMittal Europe. ‘We are therefore very pleased to announce the acquisition of John Lawrie Metals, which represents a further step in our strategy to increase the use of scrap steel across our steelmaking sites”. 

John Lawrie Metals sources around half its scrap steel from the oil and gas market. With decommissioning of oil and gas wells in the North Sea increasing due to the energy transition, supplies of scrap are expected to grow significantly over the next decade. The deal was completed on 28 February and the business will continue to be run by the current management. 

Increasing the use of scrap steel in both the electric arc furnace (EAF) and blast furnace routes of steelmaking, is one of the five key levers of ArcelorMittal’s decarbonisation roadmap.

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