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Global steel demand is expected to grow steadily China has reached its peak

Apr. 30, 2019

On April 18th, Edwin Basson, director-general of the World Steel Association, said that global steel demand is expected to maintain steady growth over the long term, growing at a compound annual growth rate of 1%. The peak has been reached.

“Overall, we can see that steel demand is growing positively and turning more to developing countries,” Basson said. “The steel market is very strong and we expect demand to increase slightly from the current 1.7 billion tons per year,” he said.

Bassen predicts that by 2040, global steel demand will grow steadily to 2 billion tons.

Earlier this week, the World Steel Association predicted that global steel demand would increase by 1.3% to 1.735 billion tons in 2019, a significant increase from last year's 2.1%, while last year's significant increase in demand was mainly driven by Chinese demand.

The World Steel Association estimates that global steel demand will be 1.752 billion tons in 2020, a year-on-year increase of 1%, while Chinese demand is expected to fall by 1%.

"China's steel demand has reached its peak," Basson said.

However, China's steel output is still growing. On April 17, the National Bureau of Statistics released data showing that in March, China's crude steel output was 80.33 million tons, an increase of 10%. Due to the end of the winter production reduction policy and the increase in end-user demand, production is expected to increase further in April.

"China's steel demand will be stable for a long time," Basson said.

Bassen said that the recent increase in production may increase China's crude steel output in 2019 from 929 million tons in 2018 to 949 million tons. As the government increases control over the steel industry, China plans to add more than 60 million tons of steel-making capacity through capacity replacement.

Bassen said that at present, the demand for finished steel products in China has reached a peak of 860 million tons. He said that the gap between production and demand means that China will continue to be a steel exporter, but exports are more stable than in the past. This year, China's steel exports will reach 60-80 million tons.

According to the world steel forecast, although India's steel demand growth is fast, it is expected to exceed 7% in 2019 and 2020, but this is not enough to support the market. “Unless Africa’s demand increases, the global market will be boosted, but it is not expected to happen in the next few years,” he said.

Bassen said that the global trade protectionism in the steel industry has intensified, or it will lead to increased regionalization of steel trade and use.

He said that the G20 Global Overcapacity Forum and China's production reduction and restructuring plans are working to address global overcapacity. Bassen said that in the past three years, the global excess capacity has dropped from 760 million tons to the latest forecast of 540 million tons.

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