Decline in demand for metal used
in real estate sector may narrow this year
Masteel Group employees measure the temperature of a steelmaking
furnace in Maanshan, Anhui province, in April. [ZHANG MINGWEI/FOR CHINA DAILY]
China's steel industry is forecast to maintain stability this
year as the world's second-largest economy is on track for a steady recovery,
said industry experts.
"China's
steel demand will likely remain steady or report slight growth this year given
the country's around 5 percent annual GDP growth target, the recovery in
downstream demand, and the move to accelerate fixed-asset investment and
promote large-scale equipment renewal and trade-in of consumer goods,"
said Zhang Longqiang, president of the China Metallurgical Information and
Standardization Institute.
Zhang
said the decline in demand for steel used in the real estate sector may narrow
this year, as the country has doubled efforts to promote the construction of
government-subsidized housing, build dual-use public infrastructure that can
accommodate emergency needs and redevelop urban villages.
Zhang
estimated that infrastructure investment will remain stable this year with a
growth rate of at least 5 percent, suggesting a steady growth of steel demand
for infrastructure construction.
"Demand
for steel in energy and manufacturing industries will keep growing, especially
in fields like wind and solar power, nuclear power, new energy vehicles,
shipbuilding and marine engineering."
Zhang
said the implementation of China's plan for driving large-scale equipment
renewal and promoting trade-in deals for consumer goods is expected to create
an additional over 14 million metric tons of annual steel demand. New
urbanization will continue to promote steel buildings and the construction of
"new infrastructure" will also boost steel demand, he said.
Data
from the National Bureau of Statistics showed that China's crude steel output
fell 1.9 percent year-on-year to 257 million tons in the first quarter.
Apparent consumption of crude steel decreased by 4.7 percent year-on-year to
232 million tons during the January-March period, said the China Iron and Steel
Association.
Jiang
Wei, vice-president of the association, attributed the notable decline in
apparent consumption of crude steel to factors like the lack of effective
downstream demand and a slow demand recovery after the Spring Festival holiday.
"The
steel industry still faces challenges like temporary severe imbalances in
supply and demand, notable declines in steel prices and rising iron ore
prices," he said.
Facing
pressures from challenging market situations, the steel industry has been
actively accelerating the cultivation of new quality productive forces, and
promoting high-end, intelligent and green transition.
Jiang
said the demand for steel used in the manufacturing sector has grown over the
years, with the sector accounting for 48 percent of the overall steel demand in
2023, up from 42 percent in 2020.
"The
steel industry has significantly accelerated the adjustment of its product
structure, in a bid to meet the increasing demand for steel used in the
manufacturing sector, including fields like automobiles, ships and household
appliances," Jiang said.
According
to a survey by the association, 40 percent of surveyed steel enterprises have
applied three-dimensional visual simulation technology on major production
lines, 79.6 percent have piloted big data models, and 18.4 percent have already
deployed partial applications of artificial intelligence. As of April 23, some
136 steel companies completed or partially completed ultra-low emission
transformation and assessment monitoring.
Despite
challenges ahead, the steel industry will focus on opportunities from rising
demand in sectors like manufacturing and energy, Jiang said.
"More
efforts should be made to adjust and optimize the offerings and create more
high-value items."