Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

ArcelorMittal pins China’s apparent steel consumption (ASC) growth for 2020 at 0-1pc down from 3.2pc in 2019. Global ASC is expected to growth by 1-2pc compared to 1.1 growth estimated in 2019. Destocking of supply chain supressed demand in global markets, particularly for flat products. Rest of the world ASC (ex-China) is forecast to rise by 2-2.5pc compared to a drop of 0.8pc in 2019. 


RegionASC 2020ASC 2019
 Change %
World (ex-China)2-2.5%-0.8%
Source: Oxford economic data, ArcelorMittal annual report


In 2020, China’s GDP and steel demand growth are likely to be weaker 0-1pc than 1-2pc growth that was expected prior to Covid-19 outbreak. The World Steel Association’s (WSA) has under recorded China’s steel production argued ArcelorMittal in its annual report for the year 2019. Steel production is under reported as operations of illegal induction furnace in China are amiss with the official numbers. China’s steel production grew by 3pc according to ArcelorMittal’s estimates rather than 8.3pc estimated earlier. Demand growth could be revised downwards due to the impact of Covid-19 and has already impacted prices of steel and iron ore.


In 2019, world crude steel production was estimated to be 1.85bn mt, up by 3.5pc from 2018, driven by increased production in China which accounted for 52pc share. ArcelorMittal expects a negative impact on steel prices in the absence of additional capacity closure in China. China’s real steel demand will weaken as infrastructure spending are generally allocated early in the year and real estate demand weakens due to lower rural-urban migration. 


In the US, strong apparent demand for flat products is expected to offset an anticipated decline for demand of long products. In Europe and Brazil, ArcelorMittal expects demand from automotive sector to remain weak, but as destocking ends, demand for flat product will improve. Also, for long products demand is expected to improve as destocking ends and construction activity picks pace. 

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