Chinese Steel Demand Forecast to Drop by 2.4% in 2019
The Chinese Metallurgical Industry Planning and Research Institute (MPI) foresee 2.4% decline in country’s overall steel demand in 2019. The demand is likely to drop to approximately 800 million tonnes (Mt). The projected decline in Chinese steel demand will lead to 0.5% overall decline in Asian demand during the year. Meantime, MPI forecasts 13% jump in steel demand by the country in 2018 over the previous year to total around 820 Mt.
According to MPI estimates, the global steel demand is likely to hit 1.71 billion tonnes in 2019, marginally higher by 0.2% over the current year. It projects lower steel demand growth in comparison with the growth estimates provided by the World Steel Association (worldsteel). The association had projected global steel demand to hit 1.681 billion tonnes in 2019, higher by 1.4% when compared with 2018. Meantime, the International Monetary Fund (IMF) projects higher year-on-year growth of 3.7% in 2018.
The drop in demand for steel from automotive industry is cited as the primary reason for Chinese steel demand. The production of automobiles had reported sharp decline during the month of October this year. The notable slowdown in construction activities and rapid fall in property investment are also likely to contribute to slower demand growth.
The MPI forecasts also said that China’s iron ore demand is likely to touch 1.15 billion tonnes in 2019, declining sharply by 4.9% year-on-year.
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