At the SteelOrbis 2013 Spring Conference & 68th IREPAS Meeting held in Doha on March 3-5, Phil Englin from World Steel Dynamics (WSD) has said that the recent slowdown in Chinese steel demand is a result of the slowdown in fixed asset investments, since the huge incentives released after the world economic crisis condensed the demand potential within a shorter than normal period of time. He added that steel intensity per gross fixed capital formation (GFCF) has also decreased in
China.
On the issue of whether
India, seen as a new potential
China, would also witness a rapid growth in its steel demand, similar to
China where demand for steel increased rapidly especially after 2007, Mr. Englin told the attendees at the Doha event that, due to political obstacles and its service-driven economy,
India is lagging behind the Chinese model. If
India had shown the same steel demand growth rates as
China, its steel demand last year would have been twice what it actually was, Englin said.
According to WSD expectations, the obsolete
scrap reservoir in
China in 2012 totaled about 57 million metric tons, while
China's demand for
scrap was 62 million metric tons. However, since obsolete
scrap accumulation is related to steel demand 20 years earlier in a given country,
China's obsolete
scrap reservoir is foreseen to rise to 220 million metric tons by 2025, while its
scrap demand is expected to reach 151 million metric tons by then, if the present steel industry structure is maintained, the WSD official stated. Eglin concluded by saying that if Chinese mills increase their
scrap usage in blast furnaces, or if the share of EAF-based steel production rises in the country, or if
China becomes a significant
scrap exporter, such changes will certainly have profound implications for the structure of the global steel industry in the years ahead.