Metals – Global steel demand to recover
The World Steel Association expects global steel demand to rise by 2.3% YoY to 1,822.3mt in 2023 and then a further increase in 2024 of 1.7% YoY to 1,854mt amid recovering manufacturing activity. Looking at China, domestic steel demand declined by 3.5% YoY in 2022 and it is now expected to grow by 2% YoY in 2023 following supportive government measures, especially for the real estate sector. Meanwhile, Chinese steel demand growth is expected to remain flat in 2024. The group also expects steel demand in developed economies to recover after declining sharply last year due to monetary tightening and high energy costs. Demand from these economies is forecast to grow by 1.3% YoY in 2023 and 3.2% YoY in 2024. As for developing economies (ex-China), steel demand is expected to rise this year by 3.6% and then by a further 3.9% in 2024.
In mine supply, Antofagasta reported that its copper mining output rose over 5% YoY to 145.9kt in 1Q23. Although, production fell by 25% on a QoQ basis mainly due to temporary output losses at the Los Pelambres mine and scheduled maintenance at the Centinela mine. The miner expects its copper production to remain healthy for the remainder of the year and maintained its full-year production guidance of between 670kt-710kt for 2023.
In ferrous metals, iron ore prices came under pressure yesterday as China’s National Development and Reform Commission (NDRC) said it would protect the market’s normal order and crack down on unreasonable price gains in the iron ore market. The group also pledged to continue strengthening the exploration of domestic resources, accelerate project building, and improve used-steel recycling.
Brazilian miner, Vale SA released its latest quarterly update, which showed that its iron ore production fell 17% QoQ to 66.8mt in 1Q23. It is fairly normal to see production impacted over the first quarter of the year, given it is the rainy season in Brazil. However, production YoY was still up 5.8%. Vale maintained its annual production guidance of 310mt-320mt for the year.
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