With all major end-use sectors collapsing like a house of cards, global steel market is expected to slump by -5.5% in the year 2020 highlighting a 6.5 million metric ton erosion in consumption. Thereafter the market is expected to recover and reach 156.1 million metric tons by the year 2027 trailing a post pandemic CAGR of 5% over the analysis period 2020 to 2027.The construction industry which accounts for 45.7% of world steel consumption is facing the brunt of labor migration, capital constraints and disruptions in construction material supply chain. Diversion of government funds from infrastructure development to pandemic firefighting has additionally impacted the construction industry, which is dependent to a large extent on infrastructure projects. In several countries, all non-essential construction projects have been put on hold with the exception of building emergency hospitals for COVID-19 care. Residential construction is taking a beating with millions of people worldwide pushed into unemployment as businesses either go bankrupt or layoff workforce to stay afloat. Unemployment rates are climbing to worrisome levels in both developed and developing economies alike. For the construction industry, this brings bad news as new housing starts go into deep freeze. The long shadow of the coronavirus is thwarting home-buying plans of consumers. With countries seeing a second wave of infections, the Covid-19 resurgence is likely to undermine the much awaited chances of a V-shaped recovery. Challenges of maintaining social distancing at construction sites is resulting in difficulties in obtaining project clearances from regulatory authorities. Ensuring raw material availability still remains a challenge for most construction contractors.

The machinery industry which is accounts for 18.1% share of global steel consumption is also feeling the weight of falling industrial output and a crumbling manufacturing sector. The worst affected industry in this pandemic driven crisis is manufacturing with its complex supply chains, labor intensive processes, and interdependencies. Division of labor, modular manufacturing strategies, outsourcing to reduce costs and increase the efficiency, consistency, and quality of each operations, have made the manufacturing sector most vulnerable amid the lockdown restrictions. An indication of the grim state of affairs is the fact that global manufacturing PMI is already declining and will fall to an estimated all-time low of 35.4 points in 2020 as compared to 53.8 in 2019. This indicates severe contraction of manufacturing activity including new orders, production, employment, supplier deliveries, inventories, customers` inventories, commodity prices, order backlog, new export orders, and imports. Global industrial output is plummeting sharply with the U.S posting steep declines of -16.5% & -15.2% in March & April 2020. The slumping demand for machine tools in response to these challenges is impacting steel demand and consumption.

Transportation and household appliances, which together accounts for 19.2% of world steel consumption ,are also feeling the heat of the crumbling aviation, automobile, ship building and consumer durable goods industry. The aviation industry has been brought down to its knees hurt by grounded flights as countries across the world sealed their borders amid stringent travel restrictions imposed in 1Q of 2020. Several airline companies across the world, especially low cost carriers, have already voiced concerns about going bankrupt without timely aid and financial rescue measures from the government. Widespread travel bans and sealing up of international and regional borders by governments worldwide to contain the spread of the disease has been a significant financial blow for airline operators. Even as governments cautiously begin to ease restrictions in 2Q of 2020, the rising second wave of infections is doing but little to bring hope to the aviation industry. With all non-essential travel coming to a halt and with the tourism industry virtually decimated a longer-term impact is more than likely to be felt by the aviation industry. The industry which suffered over US$32.6 billion in April 2020 will likely see the losses mount to over US$120.2 billion by December 2020.

With the world economy now caught in the worst recession of its kind, the impact is no more a short-term crisis. Staff downsizing and capacity reductions will now be rampant as airlines struggle to reduce costs and stay afloat. Under this scenario, a hold back on fleet expansion plans and cancellations of new aircraft purchase orders is impacting steel consumption. Similarly with world trade expected to fall by 20% to 30%, the disruptions in sea trade and falling shipping service revenues is taking its toll on demand for ocean going vessels. Chinese massive shipbuilding industry, the largest in the world received only one new order in February 2020.

Household appliances and automobile sales and production are also plummeting due to falling consumer confidence levels. Over 33 million Americans are unemployed and the share of population unemployed dropped sharply from a recent high of 62% in January 65.7% in July 2020. With the labor market in doldrums, consumer spending is plummeting. The loss in consumer confidence and erosion of household wealth and discretionary spending will impact virtually every industry and business worldwide. The COVID-19 pandemic has therefore pushed consumers to conserve cash. With unemployment rates rising amid the virus induced economic crisis, consumers are cutting spending budgets. Social outlook against this background remains grim with households expected witness erosion in wealth. Personal financial outlook, community, economy, job security confidence, purchasing and investment confidence are all tumbling as the human and economic cost of the global pandemic rises. The loss in consumer confidence and erosion of household wealth and discretionary spending will impact virtually every industry and business worldwide. As discretionary funds are used to purchase consumer electronics, household appliances and automobiles, demand highly correlates with GDP. The -3% global GDP estimated for 2020 is therefore aggravating market woes. Excluding electronic hardware required for work-from-home (WFM), demand for all other consumer electronics are declining sharply. Smartphones, TVs, smart speakers, automobiles, and smart watches, among others have all recorded declines in retail sales. The auto industry is also facing an uncertain future amid the global recession with the reduction in automobile sales expected to be steepest in the year 2020 as compared to other recessions of the past.