There is still a lot of room for growth in global steel demand

    On May 23rd, a senior executive from the World Steel Association (WSA) stated that due to the recovery of manufacturing activity, global steel demand is expected to grow by 1.7% in 2024. Previously, consumption was expected to rebound by 2.3% this year.

    Frank Zhong, Deputy Director General of the Association of Southeast Asian Nations (ASEAN), also stated at an industry conference that in the long run, ASEAN's steel demand is expected to double from the current 80 million tons by 2035.

    There is still a lot of room for growth in global steel demand in the next 10 years, "said Chen Kexin, chief analyst at Lange Steel Economic Research Center, in an interview with China Economic Times. This is mainly because there is a huge gap in global infrastructure, including in European and American countries, and the aging infrastructure needs to be updated. In addition, if the "the Belt and Road" infrastructure construction, new energy construction and other needs are released, it is conservatively estimated that the global steel demand will increase by more than 30% over 2022 in 10 years.

    Chen Kexin pointed out that China currently has the world's largest steel production capacity and advanced technology. Chinese steel enterprises should "go global", while leveraging domestic steel production capacity and increasing steel product exports, actively carry out foreign investment and factory operations, and seize the international market through a dual approach.

    Recently, data released by the General Administration of Customs showed that China exported 28.014 million tons of steel from January to April, a year-on-year increase of 55.0%; Imported steel reached 2.498 million tons, a year-on-year decrease of 40.1%. From April alone, China exported 7.932 million tons of steel, a year-on-year increase of 59.4%.

According to calculations from Lange Steel Research Center, China's net steel exports in April were 7.347 million tons, an increase of 82.8% year-on-year; From January to April, China's cumulative net export of steel reached 25.516 million tons, an increase of 82.4% year-on-year.

Behind the significant increase in China's steel exports is the significant improvement in steel competitiveness as the Chinese steel industry deepens its supply side structural reform. Since April, China's steel export quotation advantage remains significant. According to the monitoring data of Lange Iron and Steel Research Center, as of May 9, 2023, the export quotation (FOB) of India, Türkiye and CIS for hot rolled coil is 670 dollars/ton, 740 dollars/ton and 635 dollars/ton respectively, and the export quotation of China for hot rolled coil is 575 dollars/ton.

We need to combine reducing domestic steel production capacity with occupying the international market, and transfer some of the rich domestic steel production capacity to foreign countries. In this regard, we have great potential, "Chen Kexin said.