China: Crude steel output inches down by 1.7% y-o-y in CY'24 amid low domestic demand

• Realty sector struggles, infra funding stays low
  
  
• Output cuts likely in early CY'25 amid Lunar New Year
  
  

China's crude steel production dropped by 1.7% y-o-y to 1005.09 million tonnes (mnt) in CY'24, compared to 1020.51 mnt in CY'23.

However, crude steel production in December 2024 stood at 75.97 mnt, reflecting an 11.8% rise compared to 67.44 mnt in December 2023, as per data from the National Bureau of Statistics (NBS). However, the same decreased by 3% against 78.4 mnt a month ago.

Highlights

Sluggish domestic demand: China's domestic demand for steel weakened in CY'24 due to a slowdown in the real estate sector and infrastructure investment. This oversupply in the domestic market pushed steel mills to seek overseas markets to sell their products.

Aggressive exports: Chinese steel exporters adopted competitive pricing strategies to gain market share in the international market. This made their products more attractive to buyers in other countries, boosting export volumes. China's steel exports rose 22.7% y-o-y in CY'24 to 110.71 mnt against 90.26 mnt in CY'23.

Outlook

Looking at the short term, CY'25 may see further production cuts as mills are expected to continue with their maintenance programmes to balance out the lull in demand during the upcoming Lunar New Year holidays.

However, China's domestic steel demand is projected to rebound, fuelled by government efforts to boost real estate and infrastructure spending. Strong export demand, supported by competitive pricing, is also expected.