Fitch expects the global steel market to normalize in 2023

The international credit rating agency Fitch Ratings expects the global steel market, excluding China, to stabilize in 2023 to the level of 2021. SteelOrbis reports about it with the reference to the company’s data.

“The global steel sector will not fully recover next year as supply and demand shift in favor of end users. As the slowing of the global economy has ended a period of unusually high prices supported by pent-up post-pandemic demand, producer profits are expected to be low,” it said.

Fitch forecasts that global steel consumption will decline by 60-65 million tonnes in 2022, and capacity utilization will fall from 80% to 77% last year. At the same time, 20-30 million tons of the specified amount will fall to China, which annually reduces steel production.

“The outlook for Europe’s steel companies remains bleak amid high energy prices, a looming recession, declining consumer confidence and the need to diversify steel supply chains. On the other hand, sentiment has improved for the market of Turkiye, Brazil, India and North America against the background of government infrastructure support and protectionist measures,” the agency summarizes.

According to WorldSteel’s forecasts, in 2022, world consumption of steel will fall by 2.3% compared to 2021 – to 1.796 billion tons. In 2023, steel consumption is expected to increase by 1% – up to 1.814 billion tons

As GMK Center reported earlier, Fitch revised its expectations regarding thermal coal prices for 2022 and 2023, while the forecast for iron ore and coking coal remained at the previous level.

Thus, in 2022, the price of iron ore will be $115/t, in 2023 – $85/t, in 2024 – $75/t. At the end of this year, as Fitch expects, the price of coking coal will be $370/t. In 2023 and 2024, it will decrease to $200/t and $140/t, respectively.