At the SteelOrbis Fall 2024 Conference & 91st IREPAS Meeting taking place in Paris on September 15-17, Anastasiia Kononenko, head of the Asian market at SteelOrbis, made a presentation giving an overview of the Chinese steel market. Ms. Kononenko began by stating that, since this year has been challenging for China, impacting the global steel market, Chinese steel production has become one of the most important topics in the market recently. She explained that the monthly steel output in China is 20 million mt higher than during the previous crisis in 2015. Although crude steel production in China decreased by 2.2 percent year on year during the first seven months of the current year, on a more product-specific level, rebar production declined by 15 percent, while HRC production rose by five percent. Accordingly, the decline in output, she noted, was not sufficient to help ease the current difficult situation resulting from the weak steel demand in China against the backdrop of its struggling real estate market. Apparent crude steel demand in China fell by five percent year on year in the first seven months, while the rebar segment was negatively impacted by the switch to new product standards.
The SteelOrbis representative indicated that, domestically, the relatively high production and weak demand resulted in an increase of over 20 percent in China’s steel exports. Besides its traditional export markets such as Vietnam, Pakistan and South Korea, China has also increased its presence in the MENA region, selling over 1 million mt of HRC each to the UAE and Saudi Arabia, and also to Turkey, in the first seven months of the year. Another signal showing the weakness of the Chinese steel market is that its monthly semi-finished steel exports have also increased, exceeding 300,000 mt in the past six months, compared to 100,000 mt in the full year of 2022.
Another result of China’s high production and weak local supply, according to Ms. Kononenko, is that Chinese mills incurred financial losses throughout this summer. Even iron ore prices dropping below the $100/mt mark failed to help them with this problem, she said, though their margins are expected to improve in September.
Ms. Kononenko concluded by stating that all the measures taken by the Chinese government, including financial support for certain real estate projects and the halting of the country’s steel capacity replacement program, will have delayed impacts, so for the short term the market will continue to struggle. China’s finished steel exports are expected to remain high next year, after exceeding 100 million mt this year, while they are expected to ease as of the second half of 2025, she predicted.