Chinese steel demand is likely to recover during the current July-December half from the first half of this year, possibly by as much as 3%, Luo Tiejun, vice chairman of the China Iron & Steel Association (CISA), predicted on Thursday when addressing the 14th China International Metal Recycling Conference in Kunming in Southwest China’s Yunnan province.
“We have interviewed a wide range of steelmakers recently, and most believe that this month – July – would be the gloomiest for Chinese steel mills,” Luo said at the conference. “After that, steel demand will recover with the strengthening of COVID-19 containment measures, and the machinery manufacturing industry will maintain steady growth,” he added.
According to him, both supply and demand in China’s steel industry weakened in the first half of this year, with steel output and apparent consumption decreasing by 6.5% and 6.9% respectively.
Several factors have made him optimistic that the steel industry will regain vitality, Luo told delegates.
For example, among the series of measures adopted by the central government to drive consumer demand, the increase in investment in infrastructure construction will be especially beneficial to the steel industry, he pointed out, raising the possibility that the steel industry will recover faster from the present slump than other industries.
In the meantime, Luo suggested that maintaining the dynamic balance between steel industry development and the goal of low-carbon emissions is another vital issue the country faces. In this scenario, the steel scrap industry – a green and eco-friendly industry – should seize the opportunity presented by the economic recovery to realize the development of its own.
He suggested that to encourage steelmakers to use more steel scrap in their production, “maybe we can propose to the government that electric-arc-furnace mills be freed from the production curtailment,” Luo said, referring to Beijing’s directive that domestic crude steel output this year should fall below last year’s total.
Written by Anthea Shi, shihui@mysteel.com
This article has been published under an article exchange agreement between Mysteel Global and SteelMint.
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