Steel demand growth will slow down and environmental protection pressure

In 2019, under the joint effect of policy orientation and market expectation, the steel industry will carry out a new round of capacity replacement. Continuously increase investment in ultra-low emission transformation and environmental protection projects, so the growth rate of fixed assets in the industry remains at a high level. The total steel demand has maintained a relatively strong growth in 2019. According to CISA, China's total steel demand in 2019 is about 875 million tons, an increase of 6% year on year. According to the data of the General Administration of customs, from January to December 2019, China exported 64.293 million tons of steel products, a year-on-year decrease of 7.3%; the total export value was 53.76 billion US dollars, a year-on-year decrease of 11.3%. The total amount of imported steel is 12.304 million tons, down 6.5% year on year; the total amount of imported steel is 14.11 billion US dollars, down 14.1% year on year. From January to December 2019, China's import and export products are mainly plates, rods, wires and pipes, accounting for 59.8%, 14.9% and 13.6% of the total, while the import accounts for 83.9%, 9.6% and 2.6% of the total, respectively.

The export regions cover five continents, among which Asia is the main export region, accounting for 70.0% and other regions are between 4-10%; the imports are mainly concentrated in Asia and Europe, accounting for 90.1% and 9.1% respectively. From January to December, China imported 1.07 billion tons of iron ore, an increase of 0.5% year-on-year, and the import amount was 101.46 billion US dollars, an increase of 26.64 billion US dollars, an increase of 33.6%. Compared with last year, while the total import volume remained stable, the import amount increased significantly, which had a great impact on the profits of the downstream steel manufacturing industry. Although the steel market in 2019 is acceptable, looking forward to the longer-term market prospect, China's steel production capacity has entered the stage of reduction development, and it is expected that the steel demand will increase slightly in 2020, up 2% year on year. This lower growth rate is close to the previous forecast of the world iron and Steel Association, which predicted 1%. In 2020, China's steel demand growth will slow down, production capacity will be released greatly, and the trend of supply exceeding demand is obvious. At present, the domestic steel production capacity is at the peak of release, mainly because the steel industry is in a new round of adjustment period under the influence of the "de capacity" policy in the past few years. In addition, the rapid release of production capacity, the sharp rise of iron ore price and the increase of environmental protection pressure in 2019 will continue in 2020. In 2020, the real estate market will be "stable", and the main factor affecting the development of steel industry in the future is environmental protection. China Iron and Steel Industry Association will promote differentiated "environmental protection and production limitation" and "peak shifting production", accelerate the transformation of ultra-low emissions, and further optimize the classified management and control scheme of environmental protection.