The world's largest steel market, China, has recorded a substantial decline in steel consumption during the first nine months of 2024, marking a concerning trend for the industry. According to CISA's latest report, the country's apparent steel consumption dropped by 6.2% compared to the same period last year, reaching 688 million metric tons.
The production side has similarly witnessed a decline, with crude steel output falling by 3.6% year-on-year to 768.48 million metric tons during the same period. This reduction aligns with Beijing's ongoing efforts to balance supply and demand while maintaining its commitment to carbon emission reduction targets in the steel sector.
The downturn in steel consumption has been primarily attributed to the ongoing challenges in China's property sector, which traditionally accounts for approximately 35% of the country's steel demand. Major real estate developers like Country Garden and Evergrande have faced significant financial difficulties, leading to reduced construction activities and consequently lower steel demand.
The manufacturing sector's performance has also contributed to the decreased steel consumption. Several industries, including automotive and machinery manufacturing, have experienced slower growth rates, impacting their steel requirements. This slowdown has affected major steel producers such as Baowu Steel Group and Ansteel Group, forcing them to adjust their production strategies.
The impact has extended beyond domestic markets, affecting international trade dynamics. Chinese steel exporters have increased their presence in international markets to compensate for reduced domestic demand, leading to heightened competition in global steel trade. This has prompted responses from other steel-producing nations concerned about market oversupply.
