World Steel Association released on Thursday that the decline of global steel demand caused by COVID-19 would be a much smaller decline than previously expected.

World Steel Association predicted that global steel demand would drop by 2.4% to 1.725 billion tons, with the decrease lower than June's expectation of 6.4%. China's large amount of stimulus spending encouraged iron and steel consumption over the past months.

The association noted that global steel demand is expected to recover next year as the second wave of COVID-19 would cause limited effects on industrial production.

Edwin Basson, the director general of World Steel Association, said, "The recovery of Chinese economy is very strong, so as the steel demand. Looking around 2020 and 2021, the COVID-19 pandemic will bring a short but acute V-effect on steel demand and the sharp decline mainly appeared in the first half of 2020."

After the expectation of crude steel demand decrease, the association forecasted that global steel demand would increase by 4.1% in 2021 to 1.795 billion tons. However, the increase would not be even. The steel demand in China would move up by 8% this year while the demand of other developed economies would drop by 14.9%. China takes up 57% of the global steel consumption.

Although the recovery of automobile industry is slow, the other steel consumption industries perform well in resurgence. He added that nationwide lockdowns will not be repeated and the situation will continue in the coming months.