The continued rise of China was discussed during the opening keynote session of CRU’s 17th World Steel Conference in Rome earlier this week.
BHP Billiton’s Global Steel Analyst Calum Baker said the last 15 years had been all about China in terms of steel production with 500Mt of extra steel demand since the year 2000.
Although the rate of production is expected to slow it will still produce significant volumes and by 2025 will account for the bulk of global steel production growth, with global steel production forecast to rise to 2.4bnt by then.
This will be due to the continued urbanisation in China, followed by India, with the combined populations of the two countries forecast to be 2.8bn people. In China the urban population is currently 43% of the total population - this is predicted to rise to 64% by 2025.
“All these people need a place to live, jobs and transport to get them to work,” said Mr Baker. “All these factors are steel intensive.”
China is expected to have 120 ‘megacities’ of more than 10 million people by 2025, with 221 cities of more than one million people. This will require more roads, mass transit systems, office space and skyscrapers.
In addition, China is expected to have a fast growing service sector and employees in this sector will have high disposable incomes to spend on more consumer goods.
Mr Baker added that China will also account for the bulk of iron ore demand to 2025, rising to 550Mt, Most of this will have to be imported because its own iron ore quality is not good.