During the last few months, most market observers have focused their attention on the rapid recovery of steel production in China. As coronavirus impacted the world’s output, China was the first to come out of the pandemic crisis, and its output has been reaching record levels during the last few months.

Last week, nevertheless, Li Xinchuang, Vice President of the China Iron and Steel Association (CISA), told the audience of the the Kallanish Asia Steel Markets virtual conference that under China's policy to encourage the development of high-quality steel, China's steel production will steadily decline after reaching its current peak levels. He agreed that total output will remain at a relatively high level for many years, but stressed that the medium-long term trajectory is for it to decline later.

During the conference he also added that the strong 2020 recovery in demand has led to a short-term shortfall in supply in the Chinese steel market. China has therefore become a net steel importer in the first half of this year, but this situation will be corrected by the end of this quarter and China will resume its role as a net exporter, he believes.