The World Steel Association (WSA) expects infrastructure and manufacturing growth to offset lost real estate demand in 2024. But they admit they underestimated the weakness in Chinese steel demand in the fourth quarter of 2023, so they had to revise their 2023 demand forecast down by about 5% from October last year. China's steel use estimate in 2023 is expected to fall 3.3% from last year, much more in line with experts' estimate of -3.5% than the WSA's original forecast of 2% growth.
China is pursuing policies to boost demand by building affordable housing, renovating urban villages and constructing emergency public facilities, the so-called Three Major Projects. But the financial burden on local governments can slow down projects. In January this year, the central government ordered 12 debt-ridden local governments to delay or stop some government infrastructure projects.
On the manufacturing side, China saw robust auto production in March and shipbuilding growth in the first two months of the year. However, there are signals around the world, including from the EU and the US, about additional trade protection measures. The European Commission began customs registration of electric vehicles from China last month as a step in an anti-subsidy investigation carried out since October last year. Meanwhile, five national unions last month petitioned the U.S. Trade Representative to investigate China's shipbuilding sector. In addition, steel producers in Vietnam filed anti-dumping petitions against Chinese hot-rolled coils last month.
The China Iron and Steel Association (CISA) and the China Metallurgical Planning and Research Institute (MPI) estimate that demand in 2024 will fall by 1% and 1.7% year-on-year, respectively.
