At the 19th Steel Development Strategy Conference held in Shanghai on April 21-23, Zhang Qiusheng, chief analyst and senior engineer at Jiangsu Province-based Chinese steelmaker Nanjing Iron & Steel Co., Ltd., stated that China’s GDP grew by 4.5 percent in the January-March period - even though the real estate industry contributed only a year-on-year rise of 1.3 percent in the given period - signaling that China’s development started to improve following the easing of Covid-19 measures since December last year.
The demand for steel improved in the first three months this year, Mr. Zhang noted, and the year-on-year improvement in demand will likely continue during the remainder of the year. However, the overcapacity in the steel industry will be a more serious problem for China. For instance, China’s steel capacity is expected to total 1.25 billion mt, while apparent consumption reached 910 million mt in 2022 and will likely total 960 million mt in 2023, still much lower than the overall capacity.
Moreover, Mr. Zhang said that average steel prices hit a peak level in March and will see another peak level in the November-December period this year, while price changes will range at around RMB 300-400/mt ($43.6-58.1/mt) for the whole year.
As for the second half this year, steel capacity utilization rates will be controlled, with China implementing production restrictions for the steel industry, which will bolster steel prices from the supply side.
