MNI: China Steel Demand Seen Falling Next Year
MNI (BEIJING) - China’s steel demand is anticipated to fall in 2025 to under 100 million tonnes, as fiscal stimulus targets consumption and the real-estate market continues to decline, local analysts told MNI, adding manufacturing strength will partially offset the weakness.
Overall crude steel demand will fall around 1.8% to about 992 million tonnes in 2025, said Zhuo Guiqiu, ferrous metal researcher at Jinrui Futures, noting recent Politburo calls for proactive fiscal spending would prioritise consumption and improving livelihoods above steel-heavy infrastructure and construction projects.
The Central Economic Work Conference this month adjusted monetary policy to “moderately loose,” the first change since 2010, but this would have limited impact on steel prices, which typically responded more to fiscal support, Zhuo added. Real-estate consumption would also decline as new-starts and construction activity fell, with the government more focused on boosting sales, clearing idle stock and controlling new additions, he added.
With authorities not likely to implement significant real-estate or infrastructure stimulus, strong growth in manufacturing driven by an expansion in the government’s consumer trade-in programme would partially offset potential declines from weaker real estate and external demand for manufacturing, said Zhou Fuhan, ferrous analyst at Nanhua Futures.
Beijing’s latest CNY10 trillion plan to address local government debt would support incremental steel demand stemming from regional projects next year, Zhou added, with overall appetite roughly flat year-on-year. (See MNI: China To Issue More Bonds As Stimulus Targets Consumption)
EXPORTS
Chinese steel shipments will likely fall about 10 million tonnes in 2025 as trading partners step up anti-dumping measures and domestic authorities tighten export controls, Zhuo said, pointing to the 22.6% growth between January and November to 101 million tonnes.
However, orders will remain solid despite higher trade tariffs due to China’s strong price advantage in global markets, Zhou noted.
Jiang Wei, vice president at the China Iron and Steel Association, recently called on domestic steel firms to internationalise operations given increasing tariffs and to maintain China's competitiveness.
PRICES
Steel rebar prices will likely fluctuate around CNY3,300 per tonne in the near future, with a possible dip to about CNY3,200 per tonne in Q1 due to seasonal inventory build up, Zhuo said.
The price outlook remained subdued given relatively loose supply, but could improve later in 2025 as reductions in the local government debt burden allows for more project starts, Zhou added.
The China Federation of Iron and Steel Logistics’ November industry PMI reached 50.6, down four points from October, highlighting a slowdown in demand growth.