China's steel consumption to reach 900 mnt in 2024

MySteel Global: China's steel consumption is expected to slip to around 900 million tonnes (mnt) this year and will likely stay around this level in the coming several years, Wang Yingsheng, chief economist of the China Iron and Steel Association, told delegates at Mysteel's semi-annual conference in Beijing on 19 July.

The country's total apparent consumption in terms of crude steel this year is unlikely to exceed 910 mnt, Wang predicted, and will definitely end the year below the 933.4 mnt recorded for 2023. Moreover, it is also possible the total might even fall below 900 mnt, he warned.

Over the first six months of this year, China's apparent crude steel consumption came in at 478.7 mnt, falling by 3.3% compared with the same period last year, Wang pointed out.

The decrease in domestic steel consumption has also placed Chinese steel mills under great pressure, with the average profit margin on sales among CISA's member mills during the first five months of this year decrease further to 0.99%, down from an average of 1.38% during 2023.

As for the country's steel-user industries, China's property market has remained weak overall, though the decrease in this sector has eased somewhat compared with the previous year, Wang remarked

In parallel, investment growth in the infrastructure sector also slowed during this year's January-June half to reach 5.4%, down by 1.1 percentage points compared with that for the first quarter of this year, and lower by 0.5 percentage point from that for full year 2023, Wang reported.

On the other hand, China's manufacturing industries performed well during this year's first half, he noted, especially container manufacturing where production of these achieved substantial growth of 153.4% on year.

With these changes, the structure of steel consumption and production in China have changed accordingly, Wang said.

For example, the proportion of steel consumed in China's construction sector including property and infrastructure development had been shrinking continuously since 2021 to reach 52% last year, while that for manufacturing had increased to 48% last year from 42% in 2020.

During 2023, China's production of long steel dropped by 13.1% from that in 2020, while output of hot-rolled coil jumped by 24% during the same period, according to Wang.

Note: This article has been written in accordance with an article exchange agreement between MySteel Global and BigMint.