A slew of market dynamics, and government action to consolidate and make the steel industry ‘greener’, is going to result in “restricted” steel production in China in 2020.
The China Iron and Steel industry association (CISA) on Tuesday forecast steel demand in China to be at 890mn mt in 2020, a year-on-year increase of 2 pc, but far lower than maximum capacity.
The restriction of production capacity precedes reforms in the steel industry that are slated to kick in this year, among them, supply-side structural reforms that are aimed at ultra-low emissions.
CISA will also promote technological innovations and implement a strategy for acquisition and use of raw material.
Profits of key steel enterprises in 2019, as per the CISA forecast, are expected to reach CNY180bn, up from CNY84.7bn in 2015.
According to World Steel Association, China produced 904.17mn mt steel in Jan-Nov 2019 compared to 928.3 mn mt produced in 2018.