The world’s largest steel producer will consume 890 million tons this year, leaving it with a large surplus, officials at the China Mineral Industry Planning and Research Institute said at a press conference.

Official data showed last week that China produced 952.14 million tons of crude steel in the first eleven months of 2023, an increase of 1.5% year on year.

China has also exported 82.66 million tons of steel products this year so far, the highest amount since 2016 and more than previous expectations.

The China Metallurgical Industry Planning and Research Institute expects steel demand in China to decline by 3.3% in 2023 compared to 2022 and to decline by 1.7% in 2024, affected by a significant decline in construction activity.

The country’s steel industry has come under significant pressure from the debt-ridden property sector. Demand for construction steel will decline 4.8% this year compared to 2022 to 506 million tons, the researchers at MPI said.

Steel demand is set to contract in 2024 to 875 million tons, they added, with construction steel demand dropping 4% next year.

Demand from the infrastructure sector will help to partly offset the decline from the property market.