China: CISA expects steel demand to gradually improve

The China Iron and Steel Association (CISA) estimates that steel demand will improve subsequently at a later stage.

Qu Xiuli, vice-chairman and secretary-general of the China Iron and Steel Association (CISA), recently said at a conference to deliberate on the performance of the first quarter (January-March) of 2022 that the organisation would closely track changes in domestic and foreign markets, continue to strengthen monitoring and analysis of economic operations, and aim to balance supply and demand.

The industry is self-disciplined, maintains flexibility in supply, and strives to promote stability in the entire industry through ensuring sustained supply and prices.

Qu Xiuli said that since the beginning of this year, the steel industry has been running smoothly on the whole and achieved a good start in the first quarter. At the same time, affected by factors such as strict Covid curbs and the rapid rise in commodity prices, iron and steel producers are facing logistics and transportation challenges along with rising costs.

In the first quarter, market demand has been relatively weak, and steel production has declined y-o-y. The international environment is more complex, with steel imports and exports declining y-o-y.

According to estimates of CISA, in the first quarter, the actual steel consumption of the main steel-using industries fell by 5% y-o-y, of which the construction industry fell by 7% and the manufacturing industry, by 2%. During the same period, China’s apparent steel consumption was about 235 million tonnes, a y-o-y decrease of 9.5%.

“In the later period, with the easing of the epidemic situation and the government evolving multiple policies, demand for steel will gradually improve,” Qu Xiuli said.

Shi Hongwei, deputy secretary general, CISA, also said that steel consumption will increase at a later stage with further control of Covid, improvement in the supply chain and resumption and gradual flow of bulk logistics.

In the second half of this year, steel consumption will not be weaker compared to the same period last year, and the pent-up demand in the earlier period will be released, he said.