China industry body sees rising steel demand in 2021, eyes raw materials safety

Credit: REUTERS/CHINA STRINGER NETWORK

By Min Zhang and Shivani Singh

BEIJING, Jan 27 (Reuters) - China's steel demand will extend slight increases in 2021, supported by stable macroeconomic policies, the steel association said on Wednesday, although the country's industry ministry had urged less crude steel output this year.

Economic policies that China adopted to cope with the coronavirus pandemic will shore up China's steel demand, Qu Xiuli, vice chairwoman of the China Iron and Steel Association (CISA) said at a news conference.

Citing a desire to reduce carbon emissions, the industry ministry had asked China's mammoth steel sector to churn out less crude steel in 2021 than the 1.05 billion tonnes record it logged last year.

But CISA's vice chairman, Luo Tiejun, told the briefing that higher demand this year would mitigate the effects of that request.

"We can strengthen imports of primary steel products, especially billets... so that rising demand can be met without increasing crude steel output," said Luo.

Luo also mentioned that government is planning to roll out favourable policies to encourage imports like billets and hot-briquetted iron.

The world's top steel producer shipped out 53.67 million tonnes of steel products in 2020, down 16.5% from a year earlier. Its imports, meanwhile, jumped 64%, and growth of billet purchases almost quintupled, according to the CISA.

As the recovery of steel demand and production in overseas markets still faces difficulties amid the pandemic, the steel association anticipated China's rising imports and falling exports to continue this year.

CISA had also warned of supply issues for steelmaking ingredients, a "sour point" China's ferrous sector faces, as about 80% of its total iron ore demand is met by imports.

There are a few overseas mines with Chinese interests, and the association is lobbying the government to lower costs for development of domestic mines, CISA said.

(Reporting by Min Zhang and Shivani Singh; Editing by Tom Hogue, Ana Nicolaci da Costa and Gerry Doyle)

((ShivaniSingh2@thomsonreuters.com; +86 10 5669 2115;))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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