By Eric Onstad

Global steel demand is expected to fall 6.4% this year due to the COVID-19 pandemic's impact on industrial and construction activity, but bounce back next year, the World Steel Association said on Thursday.

Wide swathes of industry such as automakers shut down during lockdowns to curb the coronavirus, slashing the need for steel and spurring the closure of many blast furnaces.

"This virus, the pandemic impact, really hit our industry at all levels," Director General Edwin Basson told an online presentation.

The group of producers that account for around 85% of global steel output took the view that any second wave of the virus would not prompt severe lockdowns, he added.

After a fall this year to 1.65 billion tonnes, it forecast a rebound in steel demand of 3.8% in 2021 to 1.72 billion tonnes as part of a "best case" economic scenario that was developed jointly with the Organisation for Economic Co-operation and Development (OECD).

"The current view that we have is that we are on track for the best case scenario, the one we have showed you here," Basson said.

He did not give details of the worst case prognosis.

Globally, the automotive industry is expected to recover more slowly than the construction sector, he added.

The impact of the virus has been uneven, with steel demand in top producer and consumer China expected to rise 1% this year while tumbling by 17% in developed economies, the association said.

"China is at the moment experiencing a very rapid recovery phase out of the effects of the virus," Basson said.

On Wednesday, Austria's Voestalpine reported a loss for its business year, but said in China, healthier profit margins and government stimulus measures helped its nine production sites return to pre-crisis output.

Global crude steel production slid 13% to 137.1 million tonnes in April from a year earlier, while output for the first four months of the year declined 4.1%.

(Reporting by Eric Onstad; Editing by David Goodman, Kirsten Donovan)