BEIJING (Reuters) – China’s steel demand in 2023 will decline by 3.3% from 2022 and contract a further 1.7% in 2024, a state researcher forecast on Friday, weighed down by a significant drop in construction activity.
The world’s top steel producer will consume 890 million metric tons this year, officials at the China Metallurgical Industry Planning and Research Institute (MPI) told a press briefing, leaving it with a significant surplus.
China manufactured 952.14 million tons of crude steel in the first 11 months of 2023, up 1.5% year-on-year, official data showed last week.
It has also exported 82.66 million tons of steel products so far this year, the highest amount since 2016 and more than earlier forecasts.
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.
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Demand from the infrastructure sector will help to partly offset the decline from the property market.
“The issuance of one trillion yuan of sovereign debt as well as local government debts that are frontloaded in the fourth quarter of 2023 will support the infrastructure sector in 2024,” said Xiao Bangguo, vice president of MPI.
China’s steel exports next year could slightly fall, said Guan Zhijie, vice general engineer at MPI, as economic growth overseas slows.
(Reporting by Amy Lv and Dominique Patton; Editing by Christian Schmollinger and Sonali Paul)