Speaking at the 48th annual meeting of worldsteel (World Steel Association) held in Moscow on October 6, Hans Jürgen Kerkhoff, chairman of the worldsteel economics committee, said that, with a seven percent GDP growth expected for this year, China is facing "a new normal". Mr. Kerkhoff added that China's "new normal" will also bring a new normal for the global steel industry until other emerging economies break out of the current slump.
The decline in China's steel demand is due to the current slowdown in China's real estate sector, which is a government-induced correction aimed at avoiding a bubble burst, according to Mr. Kerkhoff. China's housing market is expected to recover in the second half of next year thanks to government measures. Mr. Kerkhoff added that the mini-stimulus implemented by the Chinese government has been instrumental in avoiding a hard landing of the Chinese economy.
Regarding other emerging economies apart from China, Kerkhoff said that such economies possess high potential for growing steel demand via investment and infrastructure development. Implementation of reforms to tackle structural bottlenecks and investment-inducing government measures will unleash the potential, he stated.
Commenting on GDP growth, the economics committee chariman remarked that developing countries performed below the expectations in 2014 and said that developed countries will grow faster than developing countries, which is not traditionally the case.