India's steel demand likely to fall by 18% in 2020: worldsteel

Although the downturn is led by consumer and service sectors, massive dislocations in spending, labour markets, and confidence are fuelling declines in steel-using sectors, the global body said.

"While, the steel demand in the developing economies excluding China is expected to fall by 11.6 percent in 2020. India is likely to face an 18 percent decline in steel demand in 2020, which will rebound by 15 percent in 2021," it added.

In India, it said, the government implemented the most stringent nationwide lockdown measures in the world, bringing industrial operations to a standstill. Construction activity was halted entirely at the end of March, and recovery is expected to remain subdued due to the slow migration of labourers.

Further, supply chain disruptions coupled with slower demand recovery will hit the steel-using industries like the automotive and machinery sectors.

On demand recovery, worldsteel said global steel demand is expected to recover by 3.8 percent to 1,717 MT in 2021.

The reduction in global steel demand will be mitigated by an expected faster recovery in China than in the rest of the world.

In India, the government's support to rural income, as well as expected consumption related to the upcoming festive season, will help in substantial recovery of demand for consumption-driven manufacturing goods in the second half, it said.

Supported by the government stimulus, recovery in construction will be led by infrastructure investment such as railways. The demand in India will rebound by 15 percent in 2021, it said.