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Expert predicts weaker Chinese steel consumption in H2 of 2007

By , 2008-03-08 12:00:00

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Mr Zhang Xiaogang chairman of China Iron & Steel Association said that China's steel consumption in 2007 would weaken owing to tight macro control, obsolete steel capacities elimination and exports restrictions.

It is noted that China goes on exercising sound monetary and fiscal policies this year and curbing fixed assets investment is still among government's major jobs. This will weaken China's steel consumption and growth rate of crude steel consumption is expected to drop to 13% this year. Besides, steel capacities grow slowly whilst obsolete capacities eliminations accelerate. Growth of steel output will fall. New projects will be restricted and capacity will descend notably, following a negative investment growth in steel industry last year.

According to related policies, 2007 is the deadline for eliminating below 200 cubic meters blast furnaces, below 20 ton converters and electric furnaces and Chinese government will take strict measures to phase out these capacities. Moreover, steel exports will maintain stable or decline slightly while imports will keep firm. Mr Zhang said that the influences of the above mentioned factors will emerge in the following months.

Mr Chen Xianwen an official with market department of China Iron & Steel Association said that growth rate of worldwide demand for steel products will decline as that of world economy slows down.

International Iron and Steel Institute forecasts that global steel consumption will add up to 1.179 billion tons in 2007 up by 5.2% YoY, 3.8% lower than a year earlier and on average the consumption will grow 4.9% annually before 2010. International market changes also influence China's steel consumption.

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