CMSI : "China's Steel Demand in 2024 Expected to Remain Stable"

China's Steel Demand in 2024

Zhang Longqiang, Chairman of the China Metallurgical Information and Standardization Institute (CMSI), announced that despite the sluggish real estate market, China's steel demand in 2024 is anticipated to remain stable or see a slight increase, according to China Daily.

Chairman Zhang attributed these expectations to several factors, including a projected national GDP growth of around 5% for 2024, a recovery in manufacturing demand, accelerated fixed asset investments, large-scale equipment upgrades, and increased consumer spending.

Additionally, infrastructure investment is expected to maintain stable growth at a rate of at least 5%, potentially easing the decline in steel demand from the real estate sector.

Chairman Zhang stated, "Steel demand will continue to grow in sectors such as energy and manufacturing, particularly in wind and solar power, nuclear energy, new energy vehicles, shipbuilding, and marine engineering."

China Steel

He noted, "Implementing the Chinese government's plans to upgrade manufacturing equipment on a large scale and to encourage the trade of consumer goods such as automobiles and home appliances is expected to create additional demand for more than 14 million tons of steel."

Zhang also mentioned that new urbanization efforts will continue to promote the construction of steel-structured buildings, and the development of new infrastructure will increase the consumption of steel products.

Jiang Wei, Vice Chairman of the China Iron and Steel Association (CISA), stated, "The noticeable decline in steel consumption is due to factors such as a general lack of downstream demand and delayed demand recovery after the Spring Festival."

He added, "The Chinese steel industry still faces challenges, including a temporary severe supply-demand imbalance, a significant drop in steel prices, and rising iron ore prices."

Due to the challenging market conditions, Chinese steel companies are actively accelerating the development of new capacities and promoting high-quality, intelligent, and environmentally friendly technologies.

Vice Chairman Jiang Wei mentioned, "The demand for steel used in the manufacturing sector has increased over the years, accounting for 48% of total steel demand in 2023, up from 42% in 2020."

The local steel industry explained, "The steel industry is significantly speeding up product restructuring to meet the increasing demand for steel used in manufacturing, such as in automobiles, ships, and home appliances."

Vice Chairman Jiang Wei emphasized, "The Chinese steel industry needs to make greater efforts to adjust and optimize supply and to create more high-value-added products."

Meanwhile, according to international credit rating agency Moody's, India's steel demand is expected to surpass China's in the short term. India's steel demand will be supported by GDP growth of 6.6% in the fiscal year 2025 and 6.2% in the following fiscal year.

However, analysts note that China's production surplus and low coking coal import costs will pose challenges to India, and the increase in local production capacity may negatively impact Indian steel prices.