Steel demand is expected to decline significantly in 2020-21 in line with a projected contraction in the
global economy due to the impact of coronavirus pandemic, Tata Steel has said in its annual report. Most
of the steel producing regions are expected to witness a decline in crude steel output due to production
cuts amidst ongoing lockdowns, Tata Steel said.
The global economic growth is expected to see a contraction of over 3 per cent in 2020, Tata Steel
Chairman N Chandrasekaran said terming the slump as the "worst contraction" since the 1930s. A
contraction in the global GDP is not at all a good sign for the global steel sector as steel demand is
positively correlated with the economic growth.
"Global GDP growth eased to 2.9 per cent in 2019, against an initial growth projection of 3.5 per cent...
As we look ahead, it is important to gauge Covid-19's unprecedented impact on the global economy. It is
expected that global growth will contract by over 3 per cent in 2020, the worst contraction since the
1930's," Chandrasekaran said in the Annual Report for 2019-20.
Chandrasekaran also said that this is for the first time since the Great Depression, that both advanced
and developing economies are in recession together. The impact of the slowing economy was also felt in
the global steel sector. Global crude steel production reached 1,870 million tonne (MT) in 2019,
registering a more modest growth of 3.4 per cent in 2019 against 4.6 per cent in 2018, he said.