You are here: Home > Steel News > Latest Steel News > Fitch:...

Fitch: Chinese steel production to decline in 2020

Tuesday, 17 December 2019 12:05:40 (GMT+3)   |   Istanbul
       

International credit ratings agency Fitch Ratings has announced that it expects China's total steel production to fall in 2020 after reaching record highs in 2019.

Fitch expects a slowdown in residential property construction and an overall decrease in total steelmaking capacity in China, driven by more capacity exits from higher environmental and emission standards. Demand will be supported by higher infrastructure investment by the government, as well as a single-digit recovery in auto sales, despite the slowdown in housing construction.

Additionally, profitability in the Chinese steel industry is expected to recover due to normalizing raw material costs and stabilizing average selling prices. However, free cash flow generation is likely to diverge as China proceeds with the implementation of ultra-low emission standards, which will require significant environmental-related capital expenditure in order to avoid disruptions to production.

Fitch expects China's "annual apparent steel consumption" to fall and exports to potentially pick up if domestic demand is weaker than expected.

The rating agency said that the improved operating conditions should not result in any positive rating action, however, despite a likely rise in profitability and cash flow.


Similar articles

Fitch Ratings raises iron ore price assumptions for 2024-2026 amid limited supply

22 Mar | Steel News

Goldman Sachs revises down iron ore price forecast for H2

11 Aug | Steel News

Moody's: Iron ore prices to ease further in H1 of 2024

17 Mar | Steel News

SteelOrbis year-end review: ASEAN faced unexpected demand slowdown in 2022, improvement awaited only in late 2023

27 Dec | Steel News

Hüseyin Ocakçı: China to close 2022 with 68 million mt of steel exports

30 Nov | Steel News

Hangzhou CIEC Group: Our outlook for Chinese exports is positive

11 Nov | Interview

Shanghai Leguang Trading: Output restrictions this and next quarter will push up steel prices

09 Nov | Interview

Market opinion: China’s semis imports is not a faded trend despite recent softening

09 Nov | Longs and Billet

MIIT: China’s commodity prices unlikely to see long-term rises

21 Apr | Steel News

Moody’s: Asian steel companies will start 2020 on a negative note

03 Dec | Steel News