China's steel consumption to rise 0.6% in 2023

China's apparent consumption of crude steel is expected to edge up by 5.97 million tonnes or 0.6% on year to 973.9 million tonnes in 2023, Mysteel predicts in its newly-published forecast for the domestic steel market for this year.

The country's largest steel-consuming sector, property, is expected to recover gradually in 2023, and its drag on China's economic development may weaken. Property sales may grow slowly with the improved confidence of consumers, speeding the recovery in property investment in the second half year, the forecast suggests.

However, the real estate sector's overall weakness may continue this year as some key indicators such as land sales and property sales, still need time to recover.

For 2023, rebar consumption is expected to decline by 6% against the estimated 15% fall during 2022, as real estate investment may shrink by about 5% on year. However, the total of projects under construction may improve in the second half year after staying at a low level in the first half. For 2023, the area of newly-launched property projects may decrease by 13% on year, the report points out.

For the infrastructure sector, the on-year rise in investment may slow to 5-8% this year with the limited financial support and higher base in 2022. However, the sector may still be considered as an important vehicle to boost domestic demand and to stabilize economic growth, given the weakness in overseas demand and the property market, especially during the first half of this year.

As for manufacturing industries this year, Mysteel predicts that Chinese automobile production and sales will increase by 3% on year to 27.58 million units and 27.6 million units respectively, as auto exports may increase due to the lower output in the global market from the tight supply of automotive chips.

Yellow goods sales in China are forecast by Mysteel to grow by 1.3% on year to 270,000 units in 2023. Among the total, the volume for export will likely continue rising, jumping by 16.1% on year to 125,000 units, while that for domestic sale may slip by 8.7% on year to 145,000 units, the report shows.

The white goods sector is likely to remain weak this year, with the consumption of new appliances sliding by 1-3% on year, as demand from overseas buyers will soften further with the recession in the global economy. Domestic sales may keep stable however, Mysteel believes.

For 2023, the global economic recession for may continue in the first half year, and the impact of stagflation and interest rate rises will affect the world's major economies. Meanwhile, shipments abroad from major exporting countries and regions such as China, Vietnam and India may slow due to shrinking demand among their trading partners.

The International Monetary Fund predicted that global economic growth will slide to 2.7% this year from the estimation of 3.2% level in 2022.

In contrast, the domestic economy is likely to recover in 2023 with the central government's series of measures to stabilize the economy and its relaxation of COVID controls, according to the report. This may serve to bolster domestic consumption and help the recovery of the tertiary industry, it suggests.

In parallel, China's steel exports may decrease by 3.8% on year to 65 million tonnes in 2023, while the imports are predicted to grow by 2.2% on year to 11 million tonnes, Mysteel notes.

On the supply side, China's crude steel output is expected to dip by 6.07 million tonnes or 0.6% on year to 1.024 billion tonnes in 2023, a consequence of the thin profit margins that Chinese steel producers are expected to continue struggling with, Mysteel predicts in the report.

Written by Nancy Zheng, zhengmm@mysteel.com

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