At the announcement by worldsteel (World Steel Association) of its short-range outlook for global steel demand in 2019 and 2020 at its 53rd annual meeting held in Monterrey, Mexico, on October 14-15, Yu Yong, chairman of China’s HBIS Group Co. Ltd, stated that, even with the trade tensions between China and the US, the influence of this is actually under control. He said that this is why we will see that, even though the global economy is not that good, some more robust figures in steel demand this year and also next year. In 2019, he noted, the Chinese economy is actually doing well, with strong figures expected to be seen for steel demand in China, mainly driven by infrastructure, while the government is also trying to boost the manufacturing sectors. He pointed out that there are some areas of imbalanced development in China and so there is a lot of space for infrastructure investment. He said that, based on the forecast by worldsteel, we all think that, at least so far, that the trade tensions are still under control and we are not that pessimistic. “The Chinese economy still remains resilient and its growth will continue because in China we still have a lot of space to boost the economy,” he stated. He went on to say, “In China, we also see the contraction of the auto sector, but I think this is not due to a slowing down of the economy, but it is just because the consumers during this transition phase have to wait to see new car models and new energy vehicles. So I think it is something which is temporary and will not be a long-term contraction.”
During the same discussion, worldsteel director general Edwin Basson said that China has this year substantially surprised observers with its growth in domestic steel demand, driven by internal promotion programs in the construction sector, particularly flowing into steel demand. This in itself, he said, has helped prevent material from flowing from China on to the export markets, resulting in its slower export growth. He stated that all of this has been taking place against the background of capacity reduction, within the global forum on steel excess capacity at the G20, which at least has led to a substantial reduction in Chinese capacity, especially in the 2016-18 period, a reported reduction in 157 million mt in formal steel capacity, and the elimination of a further 140 million mt of capacity from induction furnaces. So there has been an increase in demand for steel within China itself, while capacity reduction has also limited the availability of steel for export, he remarked. He said that China is on record as saying that they are not planning at the moment to change current policy at all going forward.
Also commenting on China during the same discussion, Saeed Al Remeithi, CEO of Emirates Steel and chairman of the worldsteel economics committee, said that China had surprised people this year, but he added that in the following years it is expected to indicate a slowdown. He said that infrastructure was going to continue to be the focus of the Chinese government.
Edwin Basson also mentioned recent legislation in China changing the strength of materials in building practices, adding that this is a design feature that came in which will probably remain in the long term, even if the support for the building trade is stopped by the government.