Xiao Guobang, vice president of the China Metallurgical Planning and Research Institute (MPI), forecasts China's 2024 steel demand to drop year-on-year compared with 2023, weighed down by construction activity decline.

China's steel demand in 2023 has dropped 3.3% y-o-y to 890 million tonnes and will go down 1.7% y-o-y to 875mt, according to Xiao. Kallanish understands that steel demand in construction activity is estimated to be 506mt in 2023 and 486mt in 2024, down 4.8% and 4% compared with the previous year respectively. The construction aspect accounts for the decline as it makes up over half of total demand.

MPI expects that government will continue to adjust property policies to accelerate the promotion of affordable housing, renovation of urban villages and public infrastructure in 2024. That trend will mitigate the decline rate of construction activity in 2024 even though property market remains gloomy. The scale of special bonds is expected still at high level in 2024 although additional issuance has already implemented in the fourth quarter.

In addition to construction activity, steel demand from hardware products, bicycles and motorcycles, railways, and steel and wood furniture will go down yearly 2.1% to 23.5m t/y, 2% to 5m t/y, 2% to 5m t/y and 1.2% to 8.4m t/y respectively.

By contrast, steel demand from shipbuilding, containers, energy, automobiles, home appliances and machinery is expected to go up 16% to 17.4m t/y, 9.1% to 1.8m t/y, 4.8% to 45.4m t/y, 3.9% to 58.4m t/y, 2.2% to 16.6m t/y, and 0.6% to 173m t/y, respectively, consistent with growth in these sectors in 2023.

According to the China Iron and Steel Industry Association, production of crude steel and finished steel from January to November reached 950mt and 1,254.6mt, respectively.

MPI forecasts global steel demand to decline 1.3% y-o-y to 1.77 billion tonnes in 2023, and to rise 0.8% y-o-y to 1.78 billion tonnes in 2024.