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China Forecasts Surge in 2023 Steel Output Amid Property Challenges

CHINA: Amidst turbulence in China’s domestic property sector, the nation anticipates a rise in steel production for the first time in three years. Recent data from official sources and the China Iron and Steel Association suggests a resilient outlook for steel output in 2023, supported by robust vehicle manufacturing, escalating exports, and flourishing industrial sectors. 

China, responsible for over half of the world’s steel production, recorded an output of 874.7 million metric tons in the first ten months of 2023, marking a 1.4% increase compared to the same period in the previous year. The estimated November production figures at 76.3 million metric tons, bringing the total for the initial eleven months to nearly 951 million. 

Projections indicate that 2023’s annual steel production may surpass 1.026 billion metric tons, outpacing the 2022 figure of 1.01 billion. Despite the challenges faced by the property sector, which accounts for 35% of China’s steel demand, a modest increase in steel output is anticipated. The property industry grappled with liquidity issues and declining sales, witnessing a 7.8% drop in floor area sales from the previous year. 

However, China’s steel demand surged in other sectors like automobiles, reaching a record high in November with a production of 3.093 million units, reflecting a 7% increase from October and a remarkable 29% surge from November last year. Moreover, robust growth in machinery, infrastructure, and industrial sectors contributed to increased steel demand, showcasing an encouraging 4.6% year-on-year rise in industrial output. 

Furthermore, China’s steel exports escalated by 35.6% in the first eleven months of 2023, totaling 82.66 million metric tons compared to the same period last year. The rise in exports, along with a slight upturn in new home prices in November, suggests a potential revival in the property sector. 

This anticipated surge in steel production aligns with Beijing’s strategy to bolster economic growth, complemented by recent measures to stimulate the property market. As steel prices show signs of recovery and rebar inventories drop, steel mills might have leeway to increase output, particularly with prospects of a tentative rebound in the property sector in the upcoming months. 

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