China’s 2019 steel use, output forecast to drop
China's steel consumption could fall in 2019 after it accelerated to double-digit growth this year, state-run Chinese think-tank the metallurgical planning and research institute said today.
The institute expects 2018 steel consumption to fall by 2.4pc to 800mn t from an estimated 820mn t in 2018, its president Li Xinchuang said at a forum. Crude steel output is forecast to fall by 2.5pc to 900mn t from an estimated 923mn t in 2018. These estimates put 2018 consumption up by 12.6pc and crude steel output up by 11pc from 2017.
China's crude steel output has soared to new highs in 2018 even as it removes obsolete capacity, as remaining mills operate at higher capacity levels and electric arc furnaces replace shed blast furnace capacity. Beijing has a target to cut 150mn t/yr crude steel capacity during 2016-20, with 30mn t/yr in 2018. It claims to have eliminated another 140mn t of illegal induction furnaces last year.
China's steel output rose by 6.4pc to 782.46mn t during January-October, with October hitting a record 82.55mn t, according to national bureau of statistics data. November data will be released this week.
China's rapid output gains have made forecasts difficult. The institute's 2018 consumption forecast a year ago at 730mn t was 90mn t lower than its updated forecast today. The rapid increases coming as the country's infrastructure and real estate investment slow have fed scepticism about the reported output numbers, which could be inflated to support GDP estimates.
US investment bank Goldman Sachs earlier this year disputed China's official capacity figure of 1bn t for 2017 and estimates the year ended with around 829mn t of capacity, around 100mn t below its reported output pace this year.
source: Argus Media
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