China's steel consumption in 2019 is expected to be 886 million tons, up 7.3% year-on-year, according to a forecast released by the metallurgical industry planning and research institute on December 12. China's steel demand in 2020 is expected to be 881 million tons, down 0.6 percent year on year.

The above forecast results are calculated by weighting the results obtained by the steel consumption coefficient method and the downstream industry consumption method by the metallurgical industry planning and research institute. The institute has published the forecast results of steel demand for 11 consecutive years, and the predicted value is in good agreement with the actual value for many years.

Li xinchuang, director of the China metallurgical industry planning and research institute, pointed out that the growth of the global economy and international trade slowed down in 2019 at the release of the research results of China's and global steel demand forecast in 2020 and the competitiveness rating of steel enterprises. China has introduced a series of counter-cyclical adjustment policies in a timely manner, successfully withstood the downward pressure on the economy, and the overall economic performance has been stable. Benefiting from the steady growth of the domestic economy, China's construction, machinery, energy, home appliances and other major downstream industries steel consumption maintained a good growth trend, promoting the overall rapid growth of China's steel consumption.

Specifically, there are three main reasons for the large increase in China's steel consumption in 2019:

First, infrastructure investment grew rapidly. From January to October 2019, infrastructure investment grew 4.2 percent year on year, 0.4 percentage points faster than for all of 2018. Among them, railway transportation investment increased by 5.9 percent and road transportation investment increased by 8.1 percent.

Second, the real estate development is better than expected. From January to October 2019, China's investment in real estate development reached 10.96 trillion yuan, a year-on-year increase of 10.3 percent and an increase of 0.8 percentage points over the whole year of 2018. Of this, residential investment was 8.07 trillion yuan, up 14.6 percent and up 1.2 percentage points from the whole year of 2018. Housing construction area of real estate development enterprises was 8.55 billion square meters, a year-on-year growth of 9.0%. Housing construction started on 1.86 billion square meters, up 10.0%.

Third, industrial production is stable on the whole. From January to October 2019, the added value of industries above designated size increased by 5.6 percent year on year, maintaining steady growth.

These steel giants really give strength! Thanks to domestic demand, China's steel production has also increased significantly since 2019. From January to September 2019, China's crude steel output was 748 million tons, up 8.4 percent year on year. Steel production (including repetitive materials) was 909 million tons, up 10.6% year on year. Cisa analysis pointed out that in the first three quarters of the year, under the promotion of various national measures to stabilize growth, major projects started in various regions, creating a better market environment for the steel industry. Iron and steel enterprises seize the market opportunity, meet market demand, to achieve stable production and increase production, but at the same time, the industry also has a rapid release of production capacity and other problems.

Looking forward to 2020, China's steel demand is expected to be 881 million tons, down 0.6% year on year. According to the forecast of metallurgical industry planning and research institute, in 2020, China's economy will maintain the overall stable development trend, but the growth rate may further decline, the construction, automobile, shipbuilding and other industries steel demand will decline, the mechanical industry steel demand is basically unchanged, energy, home appliances and other industries steel demand will continue to grow.

According to the forecast, in 2020, the construction industry steel consumption 475 million tons, down 0.6% year on year; Machinery industry steel demand will basically maintain the existing scale, annual steel consumption is expected to be 142 million tons; The steel demand of the automobile industry was about 48.2 million tons, down 3.6% year on year. The demand for steel in the energy sector was about 34.5 million tons, up 1.5% year on year. The steel demand of shipbuilding industry is about 10 million tons, down 11.5% year on year. The demand for steel used in the home appliance industry will reach 14 million tons, a year-on-year increase of 3.7%. Railway steel demand was about 5.5 million tons, up 1.9% year on year.

As for the global steel demand situation, the forecast released by the metallurgical industry planning and research institute shows that the global steel consumption in 2019 is about 1.781 billion tons, with a year-on-year growth of 4.1%. Global steel demand in 2020 is about 1.802 billion tons, up 1.2% year on year.

 

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