Analysts said on Monday that after four consecutive years of double-digit growth, it is estimated that China's steel demand will turn moderate next year, as the Chinese government has started restricting the purchase of multiple housing units since September to control the size of developers' land. Tighten credit supply. In China, steel demand in the construction industry accounts for half of total steel demand. China is also the largest producer of construction steel. In 2009, China's construction steel production accounted for about 46% of the global market. At present, government measures to regulate the real estate market have significantly affected steel output. In the past two years, driven by the 4 trillion yuan economic stimulus plan of the Chinese government, civil and commercial construction volumes in major cities have risen sharply, and steel demand has increased significantly.
Scott Laprise, an analyst with CLSA brokerage, said that as far as Beijing is concerned, we have noticed that construction activities are not as active as before. The analyst expects China's apparent steel demand growth rate will decline to 5-7% next year, and China's steel demand growth this year is expected to be 10%. China's steel demand growth will fall and will continue to fall. Construction activities will slow down as developers try to slow down development and expect higher prices.
The Shanghai ** Exchange rebar contract for the most recent four months was in reverse. Analysts said infrastructure-related construction activities will also slow down. Most analysts expect China's steel demand growth to be around 6% next year. Some analysts expect China's steel demand growth this year to be 11%. This may mean that Baosteel, Anshan Iron and Steel Company and Maanshan Iron and Steel Company, etc., will be lagging behind next year.
Analysts said that many steel producers are facing pressure to cut production next year because the government is trying to curb the expansion of capacity in high-energy-consuming industries. Before that, the government had ordered about 2,000 steel producers to shut down production capacity in the third quarter.
According to industry sources, the closure of production capacity caused by energy-saving and emission reduction measures and the reduction of inventories by consumer companies will support steel prices. Morgan Stanley analyst Charles Spencer said that on the supply side, China’s measures to cut production capacity in high-energy-consuming industries will lead to reductions in excess production, which will lead to a decline in net steel exports. A survey of five analysts has shown that analysts expect China's steel production to increase by 4-7% next year, and this year's steel demand will increase by 10.5% to 625 million tons.
China United Steel cited the report of the China Steel Association for the same year, October, the national daily output of crude steel fell by about 2% qoq to 1.586 million tons, mainly due to the impact of energy-saving emission reductions and annual overhaul of the steel mills. But even if steel producers cut production to near-demand levels, China’s macroeconomic growth may still fall back, as China has already raised interest rates last month and interest rate hikes will lead to slower construction and economic growth. For every ton of steel produced, 1.6 tons of iron ore and 0.6 tons of coking coal are required. It is estimated that producers of these products, such as BHP Billiton, Rio Tinto and Brazil's Vale, will slow their sales to China next year. The slowdown in demand for iron ore and coking coal will lead to pressure on sea freight, especially dry bulk shipping on Asian routes.
The China Iron and Steel Association said last month that it is estimated that China's imports of iron ore in 2010 were lower than the 627.8 million tons in 2009, when China's iron ore imports jumped by 41%. Ian Roper, CLSA's commodity analyst, said that other countries' consumer companies supplement iron ore stockpiles to help stabilize iron ore prices this year, but it is estimated that spot iron ore prices will fall to US$90/ton next year.
However, iron ore prices have rebounded sharply by about 30% from the seven-month lows hit in July this year to US$153 per ton, although Chinese steel producers are not in a hurry to purchase raw materials due to weak demand outlook. Since the fourth quarter, coking coal prices have risen by 74% from the same period last year to 209 US dollars per tonne. Before that, the world's largest coking coal supplier changed its 40-year annual contract pricing mechanism to a quarterly contract pricing mechanism. An analyst at Scotia Capital said that the Chinese government plans to build 15.2 million affordable housing projects by 2012 will become an important part of next year's steel demand, and it is estimated that the plan will consume about 2,500-4, 10 million tons of steel.
Scott Laprise, an analyst with CLSA brokerage, said that as far as Beijing is concerned, we have noticed that construction activities are not as active as before. The analyst expects China's apparent steel demand growth rate will decline to 5-7% next year, and China's steel demand growth this year is expected to be 10%. China's steel demand growth will fall and will continue to fall. Construction activities will slow down as developers try to slow down development and expect higher prices.
The Shanghai ** Exchange rebar contract for the most recent four months was in reverse. Analysts said infrastructure-related construction activities will also slow down. Most analysts expect China's steel demand growth to be around 6% next year. Some analysts expect China's steel demand growth this year to be 11%. This may mean that Baosteel, Anshan Iron and Steel Company and Maanshan Iron and Steel Company, etc., will be lagging behind next year.
Analysts said that many steel producers are facing pressure to cut production next year because the government is trying to curb the expansion of capacity in high-energy-consuming industries. Before that, the government had ordered about 2,000 steel producers to shut down production capacity in the third quarter.
According to industry sources, the closure of production capacity caused by energy-saving and emission reduction measures and the reduction of inventories by consumer companies will support steel prices. Morgan Stanley analyst Charles Spencer said that on the supply side, China’s measures to cut production capacity in high-energy-consuming industries will lead to reductions in excess production, which will lead to a decline in net steel exports. A survey of five analysts has shown that analysts expect China's steel production to increase by 4-7% next year, and this year's steel demand will increase by 10.5% to 625 million tons.
China United Steel cited the report of the China Steel Association for the same year, October, the national daily output of crude steel fell by about 2% qoq to 1.586 million tons, mainly due to the impact of energy-saving emission reductions and annual overhaul of the steel mills. But even if steel producers cut production to near-demand levels, China’s macroeconomic growth may still fall back, as China has already raised interest rates last month and interest rate hikes will lead to slower construction and economic growth. For every ton of steel produced, 1.6 tons of iron ore and 0.6 tons of coking coal are required. It is estimated that producers of these products, such as BHP Billiton, Rio Tinto and Brazil's Vale, will slow their sales to China next year. The slowdown in demand for iron ore and coking coal will lead to pressure on sea freight, especially dry bulk shipping on Asian routes.
The China Iron and Steel Association said last month that it is estimated that China's imports of iron ore in 2010 were lower than the 627.8 million tons in 2009, when China's iron ore imports jumped by 41%. Ian Roper, CLSA's commodity analyst, said that other countries' consumer companies supplement iron ore stockpiles to help stabilize iron ore prices this year, but it is estimated that spot iron ore prices will fall to US$90/ton next year.
However, iron ore prices have rebounded sharply by about 30% from the seven-month lows hit in July this year to US$153 per ton, although Chinese steel producers are not in a hurry to purchase raw materials due to weak demand outlook. Since the fourth quarter, coking coal prices have risen by 74% from the same period last year to 209 US dollars per tonne. Before that, the world's largest coking coal supplier changed its 40-year annual contract pricing mechanism to a quarterly contract pricing mechanism. An analyst at Scotia Capital said that the Chinese government plans to build 15.2 million affordable housing projects by 2012 will become an important part of next year's steel demand, and it is estimated that the plan will consume about 2,500-4, 10 million tons of steel.
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