Posted on 18 Dec 2024
Both crude steel production and apparent consumption in China are expected to decline in 2025, with output contracting at a faster pace than demand, according to Mysteel's newly published forecast for the domestic steel market next year. The drop in steelmakers' production will likely be driven by weakening steel exports, it notes.
Mysteel predicts that China's total crude steel output will fall by 1.3%, or 13 million tonnes, to reach 990 million tonnes in 2025. This reduction comes amid intensifying anti-dumping measures and tariff hikes targeting Chinese steel products, which may force domestic steelmakers to rein in output.
In detail, rising trade barriers and tariff pressures are expected to impact the country's steel exports next year. Meanwhile, China may introduce regulations to address the imbalance of importing high-priced steelmaking raw materials while exporting relatively low-priced finished steel products. These measures may indirectly limit crude steel production and stabilize raw material prices in China, according to the forecast.
Mysteel estimates that China's finished steel exports will decline by 9%, or 9.56 million tonnes, to 96.65 million tonnes in 2025. This marks a reversal from the anticipated 17.7% growth this year, which would bring 2024's export total to 106.2 million tonnes.
With domestic crude steel demand peaking and beginning to decline, the industry's focus is shifting toward high-quality development. Mysteel highlights that a gradual reduction in crude steel output has become a major trend, combining both mills' proactive moves and mandated production cuts.
The forecast warns that if steelmakers keep maintaining high-level production, the industry profits will stay concentrated in the raw materials end. This would increase financial strain on steel producers and traders and raise the risk of corporate defaults. To ensure the industry's healthy development, Mysteel recommends further production controls in 2025.
On the demand side, China's apparent crude steel consumption is anticipated to shed 0.4% or 3.7 million tonnes on year to 894.2 million tonnes in 2025.
For the country's largest steel user, the property sector is estimated to enter a prolonged consolidation phase after hitting the bottom, with a V-shaped rebound being unlikely to emerge, Mysteel explains. In 2025, the country's total area of newly-launched property projects may decline by 7-10% from the previous year. During the first 11 months of this year, China's new construction starts added up to 673.08 million sq m, falling by some 23% on year, as reported.
Infrastructure investment will continue to serve as a key counter-cyclical adjustment tool, though its impact may weaken. And the manufacturing sector is expected to sustain its recovery in 2025, albeit at a slower pace.
Overall, steel demand from major downstream industries is forecast to keep declining in 2025, though the pace of decline will slow down, according to the report.
Mysteel also projects that, for the full year 2024, China's crude steel production will fall by 1.6% (16 million tonnes) to 1.003 billion tonnes, while apparent steel consumption will drop by 3.6% (33.7 million tonnes) to 897.9 million tonnes.
In terms of pricing, Mysteel forecasts that in Shanghai's market, the spot price of HRB400E 20mm dia rebar will average Yuan 3,350/tonne ($460/t) during 2025, down by Yuan 214/t or 6% from this year's average of Yuan 3,564/t. Also, the price of Q235 4.75mm dia hot-rolled coil will average Yuan 3,400/t, slipping by Yuan 270/t or 7.4% from Yuan 3,670/t in 2024, all including the 13% VAT.
China steel industry indicators | ||||
| 2025 (forecast) | 2024 (forecast) | ||
| Volume (mln t) | YoY (%) | Volume (mln t) | YoY (%) |
Crude steel output | 990.08 | -1.30 | 1,003.08 | -1.57 |
Apparent crude steel consumption | 894.21 | -0.42 | 897.94 | -3.62 |
Steel exports | 96.65 | -9.00 | 106.21 | 17.67 |
Source: Mysteel |
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China major steel downstream sectors' consumption in 2025 | ||
| Volume (mln t) | YoY (%) |
Property | 238.29 | -6.00 |
Infrastructure | 181.91 | 3.00 |
Automobile | 74.23 | 2.50 |
Machinery | 127.39 | -1.50 |
Steel structure | 111.97 | 3.00 |
Home appliance | 28.52 | 5.00 |
Shipbuilding | 17.76 | 10.00 |
Energy | 61.20 | 3.00 |
Container | 6.24 | -36.00 |
Others | 46.70 | 4.00 |
Total apparent steel consumption | 894.21 | -0.42 |
Source: Mysteel |
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Source:Mysteel Global
