Chinese steel demand to drop 2.4% in 2019

The China Metallurgical Planning and Research Institute (MPI) predicts a 201% decline in overall steel demand in the country in 2019. Demand is likely to drop to around 800 million tonnes (tons). The projected decrease in steel demand in China will lead to an overall decrease in Asian demand by 0.5% over the year. Meanwhile, MPI predicts a 13 percent jump in steel demand in the country in 2018 compared to the previous year and will amount to about 820 million tonnes.

According to MPI estimates, global steel demand in 2019 is likely to reach 1.71 billion tonnes, a slight increase of 0.2% this year. He predicts lower growth in steel demand compared to growth estimates provided by the World Steel Association (worldsteel). According to the association's forecasts, the global demand for steel in 2019 will reach 1.681 billion tons, which is 1.4% higher than in 2018. Meanwhile, the International Monetary Fund (IMF) is forecasting higher annualized growth of 3.7% in 2018.

Falling demand for steel in the automotive industry is cited as the main reason for steel demand in China. Car production reported a sharp decline in the month of October this year. A noticeable slowdown in construction activities and a rapid drop in real estate investment may also contribute to a slowdown in demand growth.

MPI forecasts also suggest that iron ore demand in China is likely to reach 1.15 billion tonnes in 2019, down 4.9% year on year.