China: Steel demand may dip further in 2025, sectoral consumption to see divergent trends

• Struggling property market to weigh on steel industry
  
  
• Manufacturing set to grow in 2025, may offer support
  
  

Mysteel Global: China's steel demand is expected to stay on a downtrend in 2025, with consumption across various industries showing divergence, Mysteel's chief analyst Wang Jianhua predicted at the company's annual conference in Shanghai over the weekend.

Specifically, Wang projected that China's apparent steel consumption could fall by 0.7% from the 2024 forecast to 893.71 million tonnes (mnt) in 2025.

A key factor driving this decline, Wang highlighted, is the ongoing struggle in China's property market, which is expected to remain a major challenge for the broader economy in 2025 and continue to weigh on the steel industry. High levels of housing inventory are likely to severely constrain steel usage in new real estate projects.

As such, steel consumption in the real estate sector is projected to drop by 6.6% y-o-y or around 20.64 mnt compared to the 2024 forecast.

On the other hand, steel demand from China's manufacturing sector is expected to see some growth in 2025, which will help partially offset losses in the property sector, Wang noted.

Specifically, steel consumption from the shipbuilding and machinery sectors is projected to rise by 6.4% and 3% y-o-y, respectively, in 2025. Similarly, demand from the home appliance and automobile industries may grow 2.8% and 1.5%, respectively, from 2024 estimates.

However, Wang expressed concerns about China's overseas steel market, citing the narrowing price gap between Chinese and foreign steel products, rising trade frictions, and the expansion of new steelmaking capacity abroad.

He forecast that China's direct steel exports in 2025 would decrease by 9.1% from the 2024 projection to around 100 mnt.

Note: This article has been written in accordance with a content exchange agreement between Mysteel Global and BigMint.