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MPI: Global and domestic steel demand forecast moderate increase in 2018

Editor: Qian Ding 丨CCTV.com

12-05-2017 14:41 BJT

By Li Shouen, CCTV.com reporter

China's domestic demand for steel will only see a minor growth of 0.7% from the forecast 725 million tons in 2017 to 730 million tons in 2018. Mainly due to China’s flatline consumption demand, which consumes nearly half of the world’s steel tonnage, the overall global demand for the commodity is forecast to stand at around 1.647 billion tons in 2018, a moderately increase of 1.7% compared to the forecast 1.619 billion tons in 2017.

This forecast was announced on Dec. 4 in a press conference held by the China Metallurgical Industry Planning and Research Institute (MPI), one of the most authoritative national consulting institutions engaging in development plan and strategies research of metallurgical industry in China, which has more than 40 years of experience in the field.

(Press conference on global and domestic steel demand forecast in 2018 and domestic steel enterprises evaluation results in 2017 held in Beijing by MPI on Dec. 4  Photo by Wang You)

Steel is often viewed as an economic barometer, since it is used in many important industries, including construction, machinery, carmaking, energy, shipbuilding, household appliances, railway tracks, containers and manufacturing etc. On the other hand, overall economic conditions worldwide and within a certain nation will also impact the demand and supply of steel and iron.

During the press event, MPI Vice President Xiao Bangguo analyzed both the favorable and unfavorable factors for the global and domestic economy, as well as for the steel industry. He believes 2018 will witness a continuous global recovery and the global economy can expect better growth, driven by the obvious recovery in the developed economies including the US, Canada, Euro-zone nations and Japan, etc., and the robust rise in the emerging and developing economies propelled by the mild increase in the bulk commodities’ price and success in internal adjustments of economy policies, etc.

Xiao also pointed out that along with the recovery of the global economy, the major developed economies are taking measures to ease away from their previous quantitative ease monetary policies, which means less support on the macro-policy side. A trend of fiercer industry competition, rising sentiments in favor of trade protectionism, possible competitive tax reductions and complicated geopolitics situation, are all factors that might result in negative influence on global economic growth.

As for the domestic situation, China's overall economy will remain steady with a comparatively robust growth trend in 2018, which means the demand for steel won’t experience any drastic changes.

But China is shifting its focus from manufacturing to services, and its economy is turning from a high speed growth mode to a high quality growth stage. Beijing is deepening its supply-side reform, which highlights stronger support for the entity economy and innovation-driven capacity, to provide high-quality products and services. Meanwhile, China is undergoing a tougher environment improvement and protection campaign to seek "greener mountains and cleaner waters." Furthermore, China is facing pressures to reduce its industry capacity, and its real estate sector is also witnessing downward pressure due to policy adjustments. All the above factors combined explained the nearly flatline growth forecast of steel demand in China in 2018.

The MPI also released its evaluation results on the competitiveness of steel companies in the nation in 2017. By analyzing 25 indexes including scale, technology, research and development (R&D), energy savings and environment protections, logistics and transportation, overall profits, cash flow and assets structure, etc., 8 out of the 103 steel enterprises are classified into A+ catalog. They are: China Baowu Steel Group Corporation, HBIS Group Co., Ltd, Jiangsu Shagang Group, Ansteel Group Corporation, CITIC Special Steel Group, Rizhao Steel Holding Group Co., Ltd., Xinxing Ductile Iron Pipes Co., Ltd., Nanjing Iron&Steel Group Corp.

(The opinions expressed here do not necessarily reflect the opinions of Panview or CCTV.com. )


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