Sheffield UK based consultants, MEPS’ consumption forecast for China has been upgraded as demand continues to boom. A figure of in excess of 490Mt is envisaged in 2010. By 2012, this could rise to 560Mt.

Shipments of ordinary steel products in China are expected to be in excess of 500Mt in 2010. Demand from car manufacturers and ship builders is healthy. Consumption from the white goods sector has been spurred on by government incentives. Ongoing investment in infrastructure and housing, particularly in rural areas, should boost steel demand in the medium/long term.

As predicted by MEPS, overseas supply in the third quarter of last year fell as a result of the withdrawal of the VAT rebate. Exports are likely to rise significantly in period two, 2011. This is due to rising global steel prices, which could make Chinese material more competitive. Foreign sales by the domestic mills could fall in late 2011/early 2012 if the renminbi appreciates against the US dollar.

Source: MEPS - World Steel Outlook