Market divided on China’s 2020 steel demand and output
Source: Mysteel
Dec 12, 2019 19:10
The academy, China’s thinktank for the national development, indicates that both the projections for 2020 are more or less at the 2019 levels when China’s GPD growth is expected to hit 6.1% on year and the CPI growth within 3%.
Xu Xiangchun, senior analyst from Mysteel Beijing office, expected both China’s finished steel demand and crude steel output to rise further in 2020 up 2% on year and 3% higher on year respectively.
Li Xinchuang, Director the China Metallurgical Industry Planning and Research Institute (MPI), confirmed to Mysteel Global that MPI, however, expected the country’s finished steel demand to ebb 0.6% on year to 881 million tonnes for 2020, and crude steel production, accordingly, to soften by 0.7% on year to 981 million tonnes, just as he shared at an industrial event on December 12 in Beijing.
“Chinese property market will continue to grow next year, though the growth rate may slow down, while the country’s infrastructure construction will be boosted, judged from Beijing’s recent stimulating efforts, so steel demand from both these sectors will increase,” Xu said, adding that “increases (in steel consumption) from these sectors will more than offset any affection from the softening in demand form the other sectors”.
With higher demand, the country’s crude steel production will be unlikely to decline, Mysteel Global noted form the past couple of years’ market reality.
So far in 2019, better demand has indeed been supportive to higher steel output, as higher steel consumption from the sectors such as property, infrastructure, machinery, new energy, home appliances have indeed led to an overall increase in steel consumption, and as a result, China’s crude steel production grew 7.4% on year to 829.2 million tonnes over January-October, though auto sector posted a large decline with its auto production down 9% on year to 23 million units over January-November.
MPI, however, argued that China’s GDP growth will slow down further in 2020 from 2019, and steel demand from the sectors such as energy and white goods may grow, but it will be insufficient to fill up the gaps from less consumption in property development, auto manufacturing and shipbuilding.
As for 2019, MPI predicted the country’s finished steel demand to grow 7.3% on year to around 886 million tonnes, and the crude steel output may approximate 988 million tonnes, or up 6.5% on year.
Written by Victoria Zou, zyongjia@mysteel.com
Edited by Hongmei Li, li.hongmei@mysteelcom
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