China’s steel demand to fall 1.7% in 2024, exports to slow

© Reuters. A worker marks steel bars at a steel and iron factory in Changzhi, north China’s Shanxi province, January 11, 2007. REUTERS/Stringer/Files

BEIJING (Reuters) – China’s steel demand will fall 3.3% from 2022 in 2023 and fall another 1.7% in 2024, a state-run researcher predicted on Friday, weighed down by a sharp drop in construction activity.

Officials at China’s Metallurgical Industry Planning and Research Institute (MPI) told a news conference that the world’s largest steelmaker will consume 890 million metric tons this year, leaving a significant surplus.

China produced 952.14 million tonnes 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 tonnes 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 considerable pressure from the indebted real estate sector. Demand for structural steel will fall 4.8% this year compared to 2022 to 506 million tonnes, MPI researchers said.

Steel demand is expected to decline to 875 million tonnes in 2024, they added, with structural steel demand falling 4% next year.

Demand from the infrastructure sector will help partially offset the downturn in the real estate market.

“The issuance of one trillion yuan of national debt as well as local government debt, which is 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 could fall slightly next year, said Guan Zhijie, deputy general engineer of MPI, as economic growth overseas slows.