Production of medium-thickness and width steel strip, coated plate, welded pipe, hot-rolled strip, heavy plate, seamless pipe, large-scale steel structure, electrical steel and other steel products grew rapidly in 2023, supported by increased demand from new infrastructure, new energy and manufacturing industries such as automobiles, shipbuilding and household appliances. This has offset the loss of demand in the real estate sector, the China Iron and Steel Association pointed out.
Consumption of steel in the traditional construction sector will not grow as high as in previous years, while demand from new infrastructure and high-end manufacturing will show strong growth, market participants predicted.
Investment in property development in China fell 9.3% annually in the first 10 months of 2023, while new housing starts, measured by area, declined 23.2%, official statistics revealed.
In the same period, China's completed investments in energy supply projects increased by 41.5% for nuclear power, 42.5% for wind power and 71.2% for solar power. The country's production and sales of new energy vehicles increased by 34.5% and 36.7% from January to November 2023 on an annualized basis, respectively.
China's downward real estate outlook continues to weigh on rebar demand
Participants expect China's real estate market to continue to weigh on steel demand in 2024, especially for rebar, as concerns over the debt ratio of property developers and the decline in the investment value of residential properties persist.
"The slow recovery in new home sales, the deep fall in land transactions over the past two years and high housing stock may continue to slow the start of new construction projects in 2024," global market experts commented.
Property developers' investment in new projects totaled 9.59 trillion yuan ($1.35 trillion) in the first 10 months of 2023, down 9.3% on year, according to China's National Bureau of Statistics.
The market participants do not expect property developers to increase their investment values in 2024.
Steelmakers, which can produce both flat steel and long steel, will restrict long steel output but increase flat steel production, as some did in 2023, sources added.
Despite several cities in China easing housing policies, it takes time for investors and home buyers to regain confidence in the real estate market, acquire new land for construction and ultimately boost steel demand, the sources advised.
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