China's steel industry showed consistent performance in the first three quarters of 2023, with increasing output and improved structural demands. Despite a 1.5% decline in steel consumption, likely due to reduced new-home construction, experts predict a rebound in demand led by manufacturing and new energy sectors.
China's steel industry has been holding steady through the first nine months of 2023, according to a recent statement by the China Iron and Steel Association (CISA). The report indicates an increase in output and a shift towards a more optimized industrial structure.
Jiang Wei, an official with CISA, attributes this growth to two key factors: increased steel demand from domestic manufacturers and a rise in steel exports. These drivers have kept the industry buoyant despite various economic challenges.
The industry has also seen an improvement in the structure of steel production and consumption. Higher demand for high-end steel products in sectors like shipbuilding, auto manufacturing, home appliances, and photovoltaic power has been noted. This shift has led to an increased export of high-value-added steel products.
Interestingly, steel consumption in China declined by 1.5% year on year during the same period. According to Jiang, this decrease is primarily due to a slowdown in new-home construction activities across the country.
Industry officials are keeping a close eye on these developments, especially since steel supply will need adjustments in the coming winter months. Orders from exporters have declined this quarter, requiring a balanced approach to steel production and supply.
While China has capped its steel production in the past two years to reduce carbon emissions, there have been no such mandates this year. Shi Hongwei, CISA's Deputy Secretary-General, indicates that adjustments will be needed to align with contracting steel demand in the winter.
Officials also predict that both steel supply and demand will decrease in the fourth quarter. Environmental concerns could potentially impose restrictions on steel production, adding another layer to the industry's evolving landscape.
China's steel industry has demonstrated resilience in 2023, balancing increased production with improved structural demand. However, with declining consumption and anticipated seasonal changes, the sector faces challenges ahead. Industry officials stress the need for agile adjustments to maintain equilibrium in the market.