According to the China Metallurgical Industry Planning and Research Institute (MPI), China’s steel demand is expected to experience a decline in the coming years. The state-backed research body has forecasted a 1.5% decrease in steel demand for 2025, following a 4.4% decline in 2024. This comes as part of an ongoing adjustment in the country’s steel consumption patterns, which are expected to hit 863 million metric tons in 2024 and drop further to 850 million tons in 2025.
The forecasted drop reflects a slowing demand in the country, which has been grappling with economic restructuring and efforts to reduce overcapacity in certain industrial sectors. A combination of factors, including slower infrastructure development and weaker demand from the construction and manufacturing sectors, are expected to contribute to the reduction in steel consumption. This dip in demand comes despite the ongoing industrial transformation in China, which has led to fluctuations in demand for raw materials. Notably, the weaker outlook for steel demand has led to a slight uptick in the price of iron ore, which has reached a four-week high. A brighter outlook for demand in China’s steel sector has led to renewed interest in iron ore markets, buoying prices as investors look for potential stability.
The steel demand slowdown has far-reaching implications for the global steel market, especially given China’s dominance as a major producer and consumer. The reduction in consumption in China, the world’s largest steel producer, is likely to impact international trade flows and global steel prices. As the country adjusts its industrial output and focuses on sustainable development, these forecasts could shape both domestic and global steel markets in the coming years. As China looks towards green transformation and economic rebalancing, the demand for steel is expected to evolve. Though 2024 and 2025 might see reductions, the longer-term outlook for steel in China could hinge on government policies aimed at modernisation, environmental goals, and infrastructure initiatives in future years.
