China’s consumption of finished steel is set to drop in 2017 after increasing in 2016, according to a report released earlier this week.
The China Metallurgical Industry Planning & Research Institute, in its report, estimates that the country’s fiished steel consumption for this year would experience a 0.9% increase to 670 million tonnes.
Next year, this number is expected to drop 1.5% to 660 million tonnes, according to the report released on Monday December 12.
“The increase of consumption in 2016 is mainly attributed to the big growth in the real estate and automotive sectors,” Li Xinchuang, president of the institute, said.
The automakers are expected to increase their consumption by 3.7% next year to 56 million tonnes.
But various other downstream industries are expected to consumeless steel.
The real estate sector is expected to consume 354 million tonnes of fiished steel in 2017, down 1.7% from this year, while the machinery industry is set to experience a 1.9% drop in consumption to 126 million tonnes.
The energy, shipbuilding and home appliances sectors too will see their consumption drop by 0.3%, 4.2% and 0.9%, respectively,
according to the report. The institute estimates that China’s crude steel output will reach 806 million tonnes in 2016, up 2 million tonnes from 2015. This too is expected to fall next year by 2.2% to 788 million tonnes. “Within the big picture of global overcapacity, the shutdown of induction furnaces which were used to produce substandard steel will not lead to tighter supply,” Li said.