Steel consumption in China will grow by 0.6% in 2023

China's apparent consumption of crude steel is expected to rise by 5.97 million tons, or 0.6% year on year, to 973.9 million tons in 2023, Mysteel predicts in its recently released domestic steel market forecast at this year.

The real estate sector, the country's largest steel consumer, is expected to gradually recover in 2023, and its impact on China's economic development may weaken. According to the forecast, real estate sales may slowly pick up as consumer confidence improves, which will accelerate the recovery in real estate investment in the second half of the year.

However, the overall weakness in the real estate sector may persist this year as some key indicators, such as land and property sales, still need time to recover.

Rebar consumption is expected to decline by 6% in 2023, compared to a projected 15% drop in 2022, as real estate investment could decline by around 5% year on year. However, the overall number of properties under construction may improve in the second half of the year after remaining at a low level in the first half. In 2023, the area of ​​newly launched properties may be reduced by 13% compared to the same period last year, the report notes.

In the infrastructure sector, year-on-year investment growth could slow to 5-8% this year with limited financial support and a higher base in 2022. stabilize economic growth, given the weakness of overseas demand and the property market, especially in the first half of this year.

In terms of manufacturing this year, Mysteel predicts China's auto production and sales will increase 3% year on year to 27.58 million units and 27.6 million units, respectively, as auto exports could increase due to a decline in production by global market due to limited supply. automotive chips.

Mysteel forecasts sales of yellow goods in China to grow 1.3% year on year to 270,000 units in 2023. Among the total, exports are likely to continue rising, up 16.1% year on year to 125,000 units, while domestic sales could fall 8.7% year on year to 145,000 units, the report said. report.

The home appliance sector is likely to remain weak this year, with consumption of new home appliances falling 1-3% yoy as demand from overseas buyers declines further due to the recession in the global economy. However, domestic sales may remain stable, Mysteel said.

In 2023, the global economic recession could continue into the first half of the year, with the impact of stagflation and rising interest rates affecting the world's major economies. Meanwhile, overseas shipments from major exporting countries and regions such as China, Vietnam and India may slow down due to reduced demand among their trading partners.

The International Monetary Fund predicts that global economic growth will slow to 2.7% this year from a forecast of 3.2% in 2022.

On the contrary, according to the report, the domestic economy is likely to recover in 2023 thanks to a series of central government measures to stabilize the economy and loosen control of COVID. It is assumed that this may contribute to an increase in domestic consumption and the restoration of the service sector.

In parallel, steel exports from China could fall by 3.8% year on year to 65 million tons in 2023, while imports are forecast to rise by 2.2% year on year to 11 million tons, Mysteel notes.

On the supply side, China's crude steel production is expected to fall by 6.07 Mt, or 0.6% year-on-year, to 1.024 Bt in 2023 due to a low margin at which, Chinese steelmakers are expected to continue to struggle, Mysteel predicts in 2023.