FINISHED STEEL DEMAND HOLDS UP IN 2012
MEPS predicts that Chinese mill output of finished steel
for sale in 2012 will climb to 706 million tonnes – up 6.8 percent, year on
year. Apparent consumption is expected to expand by 5.7 percent to reach 680
The majority of increased demand has come from the construction sector –
building of affordable homes, some real estate activity and investment in new
railway projects. This has resulted in strong activity for the supply of hot
rolled long products.
Statistics show that reinforcing bar consumption will rise by 16 percent in 2012
compared to the figure in the previous year. Double digit gains will occur in
the wire rod segment. Solid growth will also be seen for structural sections.
In contrast, the flat rolled products sector, as a whole, will report only
modest growth. This is, mainly due to the collapse in demand for new ships –
creating lower requirement for steel plates. The market for hot rolled coil and
coated sheets, used in the construction industry, held up quite well, throughout
most of 2012.
MEPS forecasts a similar pattern developing in 2013. All the signals from the
new government are that future investment policies will be similar to those in
the recent past. Urbanisation and infrastructure investment are likely to be the
main platforms for growth.
The steel companies are expected to maintain a strong positive balance of trade
in steel products in 2013. The figure will turn out to be near 20 million tonnes
in 2012. A similar figure is anticipated in the following year.
Source: MEPS China
Steel Review - December 2012 Issue
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