In its biannual Short-Range Outlook, issued Thursday, the association said it expects demand to fall to 1.65 billion metric tons this year, but recover to 1.72 billion metric tons in 2021.

“The COVID-19 crisis, with its disastrous consequences for public health, also represents an enormous crisis for the world economy. Our customers have been hit by a general freeze in consumption, by shutdowns and by disrupted supply chains. We therefore expect steel demand to decline significantly in most countries, especially during the second quarter. With the easing of restrictions that started in May, we expect the situation to gradually improve, but the recovery path will be slow,” it said.  

However, the association said the forecast is based on several assumptions: that most countries continue to ease lockdown measures through June and July; that social distancing controls remain in place; and that the major steelmaking economies do not suffer from substantial secondary waves of the pandemic.

The association also said it is possible that most countries will see steel demand drop less than they did during the global financial crisis, given that the sectors most impacted by the crisis, the consumption- and service-related sectors, are less steel-intensive. 

But the association cautioned that a high degree of uncertainty remains. 

“As economies are reopening without a vaccine or cure in place, significant downside risks exist. If the virus can be contained without second and third peaks, and if government stimulus measures are continued, we could see a relatively quick recovery.”