Steel market in China will remain balanced

Platts estimates China will reach a record 1,016 million tonnes of steel production in 2020, up from 996 million tonnes in 2019, and reach the 1 billion tonne mark for the first time.

Infrastructure-related manufacturing in China such as machinery and power generation is expected to drive strong demand for sheet metal and some flat steel products in the second half of the year. But China's auto industry, which is unlikely to emerge from its overconsumption depression in 2020, will continue to disrupt the sheet metal market.

Market sources claim that in 2020 the annual growth rate of infrastructure investment will be supported by a favorable fiscal policy, which will be around 10%, compared to minus 6.3% in January-May.

In the second half of the year, it is planned to commission 61 million tons per year of new pig iron and 83 million tons per year of new steel production capacity, including deferred projects. Platts estimates that while the new capacity will replace old ones, this year net capacity will be increased by 4 million tonnes per year for pig iron and 9 million tonnes per year for steel.