Thanks to pent-up demand after the easing of quarantine and efforts to contain prices and stabilize supplies, China’s steel industry will have an upward trend in 2023.
This was discussed at the China Iron and Steel Association (CISA) conference.
The positive outlook for steel producers is based on the prospects’ improvement in steel-consuming industries such as transportation, shipbuilding, real estate, etc.
China’s real estate market, the largest consumer of steel, is showing better trends amid government support this year.
The country’s shipbuilding sector remains stable. Factors such as the ageing of existing ships, the pressure of new environmental standards and changes in global trade routes will influence the demand for shipbuilding steel.
The rapid development of domestic multimodal transportation, road, rail and freight rail traffic between China and Europe in 2023 will support the demand for containers, another steel consumption sector.
In January 2023, the country’s steel industry new orders index stood at 43.9 points, up 5 points from December 2022, indicating that steel demand has remained stable and is recovering.
The country’s growing domestic steel consumption is likely to lead to an increase in iron ore and coking coal imports, including Australian, said Wang Guoqing, research director of the Beijing Lang Steel Information and Research Centre.
Experts believe that diversification and expansion of coke supplies can contribute to more stable domestic steel prices, and processing companies will be able to increase their profits.
China’s imports of steel products declined by 25.9% in 2022 compared to 2021, reaching 10.57 million tonnes. Imports into the country have fallen to the lowest level since 1993.
Imports have fallen due to a significant increase in the products’ cost on the back of high inflation and last year’s energy crisis.
Japan, South Korea, and Indonesia accounted for 75% of China’s total imports of steel products.