China’s 2025 steel demand to fall 1.5% on year, state research institute says
China's steel consumption in 2024 and 2025 is forecast at 863 million metric tons and 850 million tons, respectively.
The head of China’s base metals body on Tuesday said the industry should pay close attention to the risk of speculators driving prices away from fundamentals, warning that sharp fluctuations would “do more harm than good”.
Ge Honglin, secretary of the Party committee at the China Nonferrous Metals Industry Association, made the comments as base metals including copper, nickel and aluminum fell sharply after hitting multi-year highs in February.
Ge, a delegate at the ongoing Chinese People’s Political Consultative Conference (CPPCC) in Beijing, said the metals rally in early 2021 was partly driven by supply and demand fundamentals as well as expectations of a global economic recovery but did not rule out speculators had played a role.
Special attention needs to be paid to the risk of a break from fundamentals because of “deliberate speculation” amid ample liquidity, Ge said in a written response to Reuters questions.
Higher metal prices may help upstream companies to an extent but if they “blindly rise” beyond fundamentals that would “harm the entire industrial chain,” he added,
“It will inevitably raise the cost of downstream manufacturing, which will eventually be passed on to the end-users and even curb the willingness to consume,” said Ge, who sees prices returning to fundamentals as coronavirus vaccines are rolled out and stimulus policies weaken.
Ge, who previously served as chairman of state-run Aluminum Corp of China, or Chinalco, said China’s copper and aluminum smelting capacity – accounting for around half the global total – will remain relatively stable over the next five years, although utilisation rates will increase.
China’s plan to cap annual aluminum smelting capacity at 45 million tonnes is a “major contribution to the global aluminum industry,” and will help achieve carbon neutrality in the sector, said Ge, who nonetheless does not see last year’s bumper aluminum imports becoming a regular occurrence.
(By Tom Daly; Editing by David Evans)
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