Chinese steel production jumped last year and remained high in December despite a very slight slowdown from November, according to data released by the National Bureau of Statistics (NBS). Demand meanwhile also remained steady at the end of the year, Kallanish notes

In December, China produced 76.12 million tonnes of crude steel in December, up 8.2% year-on-year and down slightly from 77.62mt in November, according to NBS. That left output over the whole year at 928.26mt, up 6.6% y-o-y. The latest data implies that NBS has revised production in 2017 from 831.73mt to around 870.79mt, an increase of over 39mt.

Adjusting for net exports and yield loss, apparent steel consumption in December was up 8.66% y-o-y at 67.76mt, while apparent demand over the whole year was up 6.58% to 825.5mt. Further adjusting for inventory change, end user demand was up 12.9% y-o-y at 72.64mt, leaving end user buying over the whole year up 5.75% at 827.59mt.

Demand growth in 2018 was driven largely by both the real estate and infrastructure sectors. With real estate fading in 2019 however (see separate article), infrastructure spending is expected to play an even bigger role. Kallanish expects demand to grow by only around 1% in 2019.