China’s leading steel giant Baosteel under Baowu Group this week said that end user demand for steel will remain subdued in the short term, Kallanish learns from its public response to investor questions.

Baosteel explained this was due to the slowdown in global economic activity and the impact of Covid domestically.

For the longer term, it expects steel demand to bottom out along with the overall recovery of the Chinese economy, with the help of follow-up economic stimulus policies and the gradual subsidence of the impact of Covid.

Downstream sectors have gradually shut down as the Chinese New Year holiday will start in just over a week. Overall demand is weakening and hitting new lows. The recovery is expected to kick off in February at the earliest with the government's ambitious investment program to ensure economic growth this year.

For the whole year, expectations are positive. Luo Tiejun, vice president of the China Iron & Steel Association (CISA), said that there will be support for steel demand in 2023, although it may drop slowly.