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CISA: China’s steel consumption expected to peak at around 950 million mt

Wednesday, 06 November 2019 15:04:32 (GMT+3)   |   Istanbul
       

Speaking at the "New Horizons in Global Steel Markets" 14th Annual Conference organized by SteelOrbis in Istanbul on November 6, Su Changyong, director of international cooperation at the China Iron and Steel Association (CISA), said that crude steel production in China in September this year totaled 82.77 million mt, up 2.24 percent year on year, while steel production in the first nine months increased by 8.4 percent year on year to 748 million mt. Meanwhile, China’s finished steel exports in September decreased by 10.42 percent year on year to 5.33 million mt, while its total finished steel exports in the January-September period amounted to 50.31 million mt, down five percent year on year. In addition, in September, China’s finished steel imports came to 1.11 million mt, down 7.55 percent year on year, while its finished steel imports in the January-September period decreased by 12.2 percent to 8.75 million mt, he noted.

According to the CISA official, domestic steel consumption in China is increasing. Apparent crude steel consumption in the first nine months increased by 9.3 percent to 706 million mt, while all this increase went to supply domestic market demand. In the given period, while China’s crude steel production increased by 57.95 million mt, domestic steel consumption rose by 59.95 million mt.

As regards the outlook for the Chinese steel industry, Mr. Su said that China will prevent capacity increases, while new capacities will only be built when replacing the phasing out of existing capacity. “Since 2016, China has successfully eliminated more than 150 million metric tons of crude steel production capacity, achieving this upper target two years ahead of schedule. According to the capacity replacement announcements issued by the concerned regions, newly-built capacity is 9.9 percent less than the phased-out capacity,” he said.

Mr. Su also stated that the Chinese economy is expected to remain stable in the future, noting that this will help steel consumption to remain stable and to increase. “With different development levels and urbanization processes in different regions, large-scale infrastructure construction is ongoing. The development of different steel consuming sectors varies; therefore, in certain areas and sectors, steel consumption has not yet peaked,” he added. According to the CISA, crude steel consumption in China is entering a “plateau period”, with 850-900 million mt on average expected in the current 5-10 year period and with the expectation that the peak will be around 950 million mt. After the reduction of excess capacity, the overall steel supply and demand in China is expected to remain balanced in the coming period.

Mr. Su stated that the CISA is full of confidence regarding the future. “Trade protectionism in some countries has dragged down world economic growth and has harmed the hard-won recovery of the global steel industry. All countries in the world should join hands in opposing trade protectionism and promote the development of the world economy in a more open, inclusive, balanced and win-win direction,” he said.


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