China’s finished steel consumption increases in 2005
SteelOrbis Shanghai
In 2005, the growth rate of
China's GDP was 9.9 percent and that of fixed assets investment was 25.7 percent, which led to a strong growth in steel
consumption over expectations.
China produced 371.17 million metric tons of finished steel in 2005, and exported 20.52 million metric tons of steel products, while the import volume was 25.82 million metric tons. If not taken into consideration of inventory,
China's 2005 apparent
consumption of finished steel was 376.47 million metric tons. In 2004, the above index was as follows: output was at 299.02 million metric tons; exports was at 14.23 million metric tons and imports at 29.3 million metric tons; apparent
consumption was 314.1 million metric tons. The 2003 index was as follows: output was 240.82 million metric tons; exports were at 6.96 million metric tons and imports of 37.17 million metric tons, while apparent
consumption was at 271.03 million metric tons.
The growth rate of apparent
consumption of finished steel in 2004 and 2005 was 15.89 percent and 19.86 percent respectively. The growth rate of 2005 was 4 percent higher compared to the previous year, and also higher than the expected 10-12 percent in early 2005.
China's demand for finished steel was still in a rapid increase period.
It should be pointed out that inventory had no great influence on
China's finished steel apparent
consumption. Due to the tight capital, steelmakers in
China keep a low inventory. If the sales activity is not good, they will lower their ex-factory prices to promote the sales to sustain their operation. Thus, the overall inventory of Chinese steelmakers was low. Compared to the same period of last year, market inventory did not see much change.
Economists predicted that in 2006,
China's macro-economy will remain rapid growth. Therefore, it's reasonable to be optimistic about
China's iron and steel industry.