The development of China’s steel market

For the development of China's steel market, Xia Xiaokun, vice president of Shanghai Steel Union, said that this year, the normalization of environmental protection and production has led to a year-on-year decline in steel production. The strong resilience of China’s economy has ensured the smooth operation of domestic steel consumption, making the Chinese steel spot market The overall price is at a high level, and the profit at the production end remains high.

For the market situation in 2019, Xia Xiaokun believes that it is important to focus on environmental protection, demand, trade friction, and capacity. In the past three years, China has basically completed the task of de-capacity of 150 million tons of steel. In the future, it will mainly control steel production capacity through reduction and replacement. However, as China's environmental protection continues to increase, the environmental protection of the steel industry will become the norm. On the demand side, there are signs of weak demand in China's major downstream industries. At the same time, Sino-US trade friction may also indirectly affect the demand for Chinese steel.
According to the calculation of the steel network, domestic downstream demand for steel in China fell by about 2% year-on-year in 2019, and production was flat with 2018. The average price of steel fell by 6% year-on-year, and steel exports may rebound slightly.

Data show that since 2016, China's steel exports have continued to decline, but this year's export prices have an upward trend.
Hou Ying, representative of China Steel Association's international trade negotiator, said that global steel demand is expected to continue to grow moderately in 2019, or 1.4%, but the intensification of trade tensions and the sharp fluctuations in exchange rates have increased the uncertainty of market growth prospects. In the next two years, steel demand in other developing countries other than China is expected to increase by 5.9% and 6.8% respectively. In this context, the stability of the trade order in the Asia-Pacific region is crucial to the global market. To this end, she advocated that the three countries of China, Japan and South Korea adhere to the principles of openness and fairness, maintain trade order, jointly deal with the abuse of rules to excessively protect the market, and safeguard the hard-won stable development of the global steel market.

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