At the SteelOrbis 2023 Spring Conference & 88th IREPAS Meeting held in Barcelona on May 7-9, Frank (Shaoliang) Zhong, deputy director general of the World Steel Association (worldsteel) and chief representative of the worldsteel Beijing Office, gave a presentation regarding China’s steel demand outlook, steel decarbonization in the country, and its iron ore strategy.
Mr. Zhong stated that, with the lifting of the zero-Covid policy, China’s economic growth outlook for 2023 has increased to the range of 5.2-6.4 percent and the GDP growth outlook for 2024 has increased to the range of 4.5-5 percent, according to a various institutions including the IMF, leading to an expectation for higher steel demand in China in 2023. However, the country’s steel demand outlook for 2024 remains uncertain. Apparent crude steel consumption in China, which was at 959.3 million mt in 2022, is expected to amount to 978.5 million mt both in 2023 and 2024 if economic growth becomes a top priority for the government, if small new stimulus measures are introduced from the second quarter this year and if exports of manufactured goods are stable or just decline slightly. However, the deputy director general of worldsteel stated that in an alternative scenario featuring larger-than-expected stimulus measures and a rebound in exports of manufactured goods in 2023, apparent crude steel consumption in China is expected to total 997.7 million mt in 2023 and 977.7 million mt in 2024.
Regarding steel-using industries in China, Mr. Zhong stated that the demand from the Chinese construction industry, which has a 56 percent share in the country’s steel demand, is expected to increase by 2.5 percent in 2023 and by 0.5 percent in 2024, while the steel demand from mechanical machinery industry, which has the second largest share in China’s steel demand with 19.4 percent, is forecast to rise by two percent in 2023 and to decrease by 0.5 percent in 2024.
Talking about the decarbonization policies for the country’s steel industry, Zhong stated that China aims to strengthen the use of scrap, promote low-carbon technologies, increase the capacity of scrap recycling enterprises and the use of hydrogen and renewable energy instead of fossil fuels, as well as increase the share of electric arc furnace-based steel production in overall steel production to 15 percent by 2025 and 20 percent by 2030. Zhong also noted that the share of EAF-based production in China’s overall crude steel production remains low compared to other countries such as Turkey and the US.
Lastly, recalling that China is the leading driver of iron ore demand, Zhong stated that the country’s iron ore consumption is mostly reliant on imports. Accordingly, he noted, the country aims to secure iron ore supply from both China’s domestic mines and overseas mines in Australia, Brazil, Chile and South Africa in which Chinese companies have invested. The worldsteel official said that a few domestic iron ore projects in China are being launched, with China aiming to achieve a total annual iron ore capacity of 400 million mt from both domestic and overseas Chinese-owned mines by 2035.