China’s steel consumption is expected to rise 7.7% to 725 million metric tons this year due to an improving economy and better than anticipated performance by major steel consumers, according to an industry report seen by the NGL Scrap Metal team.
The China Metallurgical Industry Planning and Research Institute announced on Monday that steel demand will grow by 0.7% to 730 million tons in 2018, while China’s crude steel output will increase 3% year-on-year to 832 million tons in 2017, and by a further 0.7% to 838 million tons next year.
Iron ore demand is expected to rise 1.3% to 1.122 billion tons in 2017 and drop 0.2% to 1.12 billion tons in 2018.
Hot metal production in China is expected to reach 710 million tonnes this year, a 1.3% increase, but this will fall by a slight 0.1% to 709 million tonnes next year, MPI said.
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The Asian market remains the largest consumer of steel, according to the MPI. It expects consumption in this region to total 1.07 billion tonnes for 2017, up 6.9%, before growing at a slower pace of 1.8% in 2018 to 1.09 billion tonnes.
Major steel consumers including real estate construction, machinery, automobile, energy and shipbuilding will be the main contributors to the country’s rising steel demand next year.
Real estate construction will remain the biggest consumer of steel products in 2018, with demand amounting to 388 million tons, up by 0.3% from this year which is estimated at 387 million tons.
The machinery industry comes second with 138 million tons of expected steel demand in 2018, up by 1.5% year-on-year, followed by the automobile industry with 59.5 million tons, and energy with 32.5 million tons.