In 2022, under the background of repeated epidemics, conflicts between Russia and Ukraine, energy crisis, and inflation, the global economy will drop sharply. In advanced economies, the slowdown in the global economy has increased the risk of a world recession as inflation continues to rise and the Federal Reserve raises interest rates sharply. Emerging markets and developing economies are also facing greater pressure in the process of hindering the recovery of the global economy. Most countries' epidemic prevention capabilities and policy support are relatively weak. Issues such as food and energy supply disruptions and rising energy prices brought about by the Russia-Ukraine conflict are of great concern to these countries. Countries were hit harder, and the Fed's sharp rate hikes led to domestic capital outflows in these countries, forcing them to raise interest rates faster, which slammed the economy. It is worth mentioning that although China's economic growth rate will decline to a certain extent in 2022, with the gradual implementation of a package of economic stabilization policies and subsequent measures, China's economic development has begun to show signs of stabilization and recovery. important engine.
How will global steel demand change in 2023? In terms of regions, the global steel demand in 2023 will present the following characteristics:
Asia. In 2022, under the influence of factors such as the tightening of the global financial environment, the conflict between Russia and Ukraine, and the slowdown of China's economic growth, Asian economic growth will face greater challenges. Looking forward to 2023, Asia is in a favorable position for global economic development and is expected to enter a stage of rapid inflation decline, and its economic growth rate will exceed that of other regions. According to the forecast of the International Monetary Fund (IMF), the Asian economy will grow by 4.3% in 2023. According to comprehensive judgment, the steel demand in Asia will be about 1.273 billion tons in 2023, a year-on-year increase of 0.5%.
Europe. After the Russia-Ukraine conflict, the global supply chain tends to be tense, and energy and food prices continue to soar. The European economy will face huge challenges and uncertainties in 2023. High inflationary pressures will cause economic activity to shrink, and energy shortages will cause industrial development problems. , the rising cost of living of residents and the serious blow to the investment confidence of enterprises will all become obstacles to the economic development of Europe. According to a comprehensive judgment, the European steel demand in 2023 will be about 193 million tons, a year-on-year decrease of 1.4%.
CIS countries. Since the outbreak of the conflict between Russia and Ukraine, the two major economies of the Commonwealth of Independent States, the economic development of the Commonwealth of Independent States has suffered serious setbacks. In 2023, the development of the Russia-Ukraine conflict is still highly uncertain, and the European Union's "de-Russification" and sanctions against Russia by G7 countries will continue. In 2023, considering that Russia’s steel demand accounts for about 75% of the total steel demand in the CIS, affected by the sanctions, the import of important components such as Russian machinery and automobiles will be blocked, and the demand for major downstream steel industries will shrink, which may lead to a decline in the CIS countries. Steel demand fell further. According to a comprehensive judgment, the steel demand in the CIS countries will be about 50 million tons in 2023, a year-on-year decrease of 6.1%.
North America. The International Monetary Fund predicts that in 2023, the economic growth rate in North America will be 1.0%. High interest rates will increase corporate financing costs, which is not conducive to the development of steel industries such as manufacturing and construction. In addition, the newly promulgated infrastructure law in the United States will promote the growth of infrastructure investment and investment in the energy industry, which in turn will drive the growth of steel demand. Considering the development of the North American economy and construction, manufacturing, automobile, energy and other industries in 2023, it is estimated that the steel demand in North America will be about 143 million tons in 2023, a year-on-year increase of 1.0%.
South America. In 2023, dragged down by high global inflation, most countries in South America will face greater pressure in revitalizing their economies, controlling inflation, and creating jobs, and their economic growth will slow down. The International Monetary Fund predicts that the South American economy will grow by 1.6% in 2023. Among them, driven by infrastructure construction, housing construction, renewable energy projects, ports, and oil and natural gas project construction, Brazil's steel demand is expected to rise, which will directly drive the rebound in South American steel demand. According to comprehensive judgment, the steel demand in South America reached about 42.44 million tons, a year-on-year increase of 1.9%.
Africa. In 2022, Africa's economy will grow faster. Under the influence of the conflict between Russia and Ukraine, international oil prices have risen sharply, and some European countries have shifted their energy needs to Africa, effectively boosting the African economy. The International Monetary Fund predicts that in 2023, the African economy will grow by 3.7% year-on-year. Under the dual benefits of maintaining high oil prices and the start of construction of a large number of infrastructure projects, the steel demand in Africa is expected to reach 41.3 million tons in 2023, a year-on-year increase of 5.1%.
middle East. In 2023, economic recovery in the Middle East will depend on international oil prices, epidemic prevention measures, the scope of policies to support growth, and measures to mitigate the economic damage caused by the epidemic. At the same time, factors such as geopolitics will also bring uncertainty to the economic development of the Middle East. The International Monetary Fund predicts that by 2023, the economic growth rate of the Middle East will be 5%. According to comprehensive judgment, the demand for steel products in the Middle East will be about 51 million tons in 2023, a year-on-year increase of 2%.
Oceania. The main steel consumption countries in Oceania are Australia and New Zealand. In 2022, Australia's economic activities will gradually recover and business confidence will be boosted. Thanks to the recovery of the service industry and tourism, New Zealand's economy has picked up. The International Monetary Fund predicts that in 2023, the economic growth rates of Australia and New Zealand will both be 1.9%. According to a comprehensive forecast, the steel demand in Oceania will be about 7.1 million tons in 2023, a year-on-year increase of 2.9%.
Judging from the forecast changes in steel demand in major regions of the world, in 2022, due to the impact of the Russia-Ukraine conflict and the economic downturn, steel consumption in Asia, Europe, the Commonwealth of Independent States and South America will all show a downward trend. Among them, the countries of the Commonwealth of Independent States were most directly affected by the conflict between Russia and Ukraine, and the economic development of the countries in the region was severely frustrated, and the steel consumption fell by 8.8% year-on-year. Steel consumption in North America, Africa, the Middle East, and Oceania showed an upward trend, with year-on-year growth of 0.9%, 2.9%, 2.1%, and 4.5% respectively. In 2023, it is expected that the demand for steel products in CIS countries and Europe will continue to decline, while the demand for steel products in other regions will increase slightly.
From the perspective of changes in the steel demand pattern in various regions, in 2023, the proportion of steel demand in Asia will still rank first in the world, maintaining at about 71%; the proportion of steel demand in Europe and North America will continue to maintain the second and third in the world Among them, the proportion of steel demand in Europe will decrease by 0.2 percentage points year-on-year to 10.7%, and the proportion of steel demand in North America will increase by 0.3 percentage points to 7.5% year-on-year. In 2023, the proportion of steel demand in the Commonwealth of Independent States will decrease to 2.8%, comparable to that of the Middle East; the proportion of steel demand in Africa and South America will increase to 2.3% and 2.4% respectively.
On the whole, according to the analysis of global and regional economic development and steel demand, the global steel demand is expected to reach 1.801 billion tons in 2023, a year-on-year increase of 0.4%.