Chinese steel demand to slow: WSD

Feb 20, 2013 | 02:46 PM | Samuel Frizell

Tags  steel, ferrous scrap, World Steel Dynamics, WSD, Philipp Englin, Jim Kerkvliet, Gerdau, Samuel Frizell

ORLANDO, Fla. — A slowdown in Chinese steel demand and an increase in the nation’s ferrous scrap reserves could rock U.S. markets in the next decade, depending on Chinese government policy, according to World Steel Dynamics Inc. (WSD).

Steel demand in China is likely to slow as large infrastructure investments tail off in the next 10 years, Philipp Englin, chief executive officer of Englewood Cliffs, N.J.-based WSD, told attendees at the American Wire Producers Association (AWPA) annual meeting in Orlando, Fla.

"The great question with China as we look ahead is, Does steel demand really continue to grow or is there a point when this machine simply becomes unsustainable?" Englin said. "I’m a believer that at some point they could simply hit the wall and steel demand will outright decline in China."

Investment in fixed assets—such as infrastructure, housing and construction—is the primary driver behind Chinese steel demand, with as much as 90 percent of China’s steel output in 2012 aimed at those end markets, Englin said. China, the world’s largest steelmaker, produced 716.54 million tonnes of crude steel last year (amm.com, Jan. 18).....