Posted on 28 Oct 2024
Apparent steel consumption in China decreased by 6.2% year-on-year – to 688 million tons in the first 9 months of this year. Reuters reports this with reference to data from the China Iron and Steel Association (CISA).
According to the association, in 2025, the demand for steel in the country is likely to level off or decline slightly. CISA has warned of the growing risks faced by steel exports due to increased trade tensions.
Oversupply, due to demand falling faster than supply, has led to a drop in steel prices and reduced the profitability of steelmakers, some of which have increased their supplies abroad.
In addition, CISA is calling on the country’s steel mills to exercise discipline in limiting production after government efforts to stimulate the economy led to higher prices for steel products, Bloomberg writes.
In a statement released on October 24 following a meeting of 18 steelmakers, the association said there were no noticeable changes in orders for steel products. As noted, any recovery in prices does not reflect a reversal of the long-term dynamics of oversupply.
Since late September, Beijing has stepped up efforts to revive the economy. According to the agency, this has led to a sharp rise in prices for rebar, a key product, although since then the quotes have lost some of this momentum. Iron ore prices have also risen, and are now about 13% higher than before the stimulus measures were announced.
At the same time, production has fallen over the past few months compared to the previous year, and the association is interested in this trend continuing. In this way, CISA hopes to balance supply and demand. According to the organization’s forecasts, by 2035, annual steel production in China will gradually decline to 800 million tons. Over the past four years, these volumes have exceeded 1 billion tons.
As GMK Center reported earlier, in January-September, steel production in China fell by 3.6% year-on-year – to 768.48 million tons. Steel exports from the country for 9 months increased by 21.2% compared to the same period in 2023 – up to 80.71 million tons. The figure is the highest in the last 8 years.
Source:GMK Center
