(Bloomberg) --

Steel demand should climb again next year, even as a deepening energy crisis threatens the global economy’s recovery from the pandemic, according to the World Steel Association.

Consumption will rise 2.2% to 1,896 million tons in 2022, a slower pace than this year’s 4.5% increase, the industry group said Thursday. The main drivers of growth will be outside China as the country’s real estate crisis undermines demand, it said.

The energy crisis and supply-chain bottlenecks pose risks to the recovery, with some European steelmakers being forced to curb output as power costs soar. Worldsteel expects the rebound in car production to slow in 2022, with the sector continuing to suffer from a shortage of semiconductors. 

“Producers might feel the impact of the energy crisis but demand continues on for a while,” World Steel Director General Edwin Basson said in a presentation. “We don’t see a significant collapse in demand but it is quite possible in the early part of the new year we will see some curtailment of demand.”

Global steel demand boomed this year as builders and manufacturers led the rebound from the pandemic. China in particular used large scale construction projects to drive its recovery, stoking demand for the metal. 

©2021 Bloomberg L.P.