Beijing– Recent reports show that the industry could expect a dip in the demand for steel in China. As one of the largest producers and consumers of steel, officials warn China of mounting risks facing steel exports due to growing trade frictions.
Demand dropping faster than supply led to oversupplying, which has weighed down the price of steel leading to losses for many steel producers, especially those that shipped more cargo abroad.
According to the reports of Reuters, China’s apparent steel consumption slid 6.2% year-on-year to 688 million metric tons in the first three quarters of 2024, the China Iron and Steel Association (CISA) under the state commented on Friday. China’s steel output has been on the decline since 2021 when Beijing started to mandate a cap on annual growth to limit carbon emissions.
Jiang Wei, the association’s vice chairman and secretary general said, “Steel demand from the manufacturing sector will climb to around 50% or even higher this year.”
However, the World Steel Association (WSA) has forecasted that China’s share of global steel consumption will fall to less than half, a shift that hasn’t occurred in the past six years.
According to the China Iron and Steel Association (CISA), the focus of China’s steel consumption has shifted towards the manufacturing sector. The prolonged downturn in the property market has left Chinese steel producers facing profitability challenges due to declining demand.