According to a forecast made by the China Metallurgical Industry Planning and Research Institute (MPI), if the coronavirus is effectively prevented and controlled with sufficient medical supplies, China’s GDP growth will reach 5.9 percent in 2020. If the novel coronavirus pneumonia (NCP), recently coined official name of the disease, continues to have an impact, China’s GDP may grow at 5.8 percent in 2020. However, if mutation of the virus occurs, the impact will last much longer, which will result in lower GDP growth for 2020, of around 5.6 percent.
The MPI said that in 2020 China’s steel consumption is expected to decrease by 0.9 percent, 2.9 percent or 5.3 percent year on year to 885 million mt, 869 million mt or 848 million mt, respectively, based on the three economic scenarios due to the coronavirus outlined above. However, the MPI also mentioned that there is a greater probability of a more significant worsening of steel consumption as the impact of the virus will be stronger than that of the SARS epidemic in 2003, with China’s steel consumption likely to amount to 848-869 million mt in 2020, down by a range of 2.9-5.3 percent year on year. As a result, steel consumption in China in 2020 will likely drop by a range of 26-47 million mt as major downstream industries, including the construction industry, machinery industry, automobile industry, energy industry, shipbuilding industry and container industry will be negatively affected, though the home appliance industry and the railway industry will likely grow at a respectable pace.
As previously reported by SteelOrbis, the MPI’s earlier outlook issued in December had stated that China’s steel consumption volume would decline by 0.6 percent year on year in 2020, following a 7.3 percent increase in 2019.