Gone are the heydays of investment led growth in Chinese economy and consumption of steel reminiscent of past decade.
The last decade was marked with shift in population from rural to urban centers culminating in tremendous demand generation for commodities such as coal and iron ore, and materials such as cement and steel, which are needed to build roads, buildings and railways.
Per capita steel consumption in the last decade tripled from 150 to 450 kg , but the new decade has witnessed change in pattern which is likely see drop in iron ore and steel consumption . The current phase is likely to see rebalancing of supply and demand and a progressive recalibration of prices to long-term, sustainable pricing. The focus will shift to lowering cost and production rationalization to match the market expectations and rein inventory levels.
Future needs will include the next level of value added product demand viz kitchen appliances, heating and air-conditioning, cars etc.
Source – Strategic Research Institute