China’s steel demand is expected to grow in 2021 according to China Iron and Steel Association (CISA). This growth is expected to be driven by the effect of post-COVID economic stimulus coupled with stable macroeconomic policies.
Exports decline, imports rise
The industry ministry had asked China’s steel sector to produce less crude steel in 2021 than the record 1.05 billion tonnes of last year, to reduce carbon emissions.
According to CISA, China’s steel exports declined to 53.67 million tonnes of steel products in 2020, which is a 16.5% drop from 2019. Meanwhile, the steel imports surged 64% last year, and billet imports soared almost 500% in 2020.
Strengthening raw material supply
The world’s top steel producer aims to increase the supply of steelmaking ingredients, especially billets to ensure that rising demand could be met without increasing output. CISA said that the government is planning new policies to encourage such imports.
Lower taxes, overseas mines, import of scrap
CISA has requested the Chinese government to decrease the taxes and fees for the exploitation of domestic mines. The association also suggested refining steel scrap-related policies to take advantage of resources at home after Beijing allowed imports of high-grade scrap this year.
China is also currently planning to build major overseas iron ore mines by 2025 to boost the supply of the steelmaking ingredient. China presently imports 80% of the iron ore it uses.