Did China just call peak steel for itself?

Via Reuters:

The world’s top steel producer is expected to churn 981 million tonnes of crude steel in 2020 and 988 million tonnes in 2019, according to Li Xinchuang, president of the China Metallurgical Industry Planning and Research Institute. Steel demand in China is expected to fall 0.6% year-on-year to 881 million tonnes in 2020, but rise 7.3% to 886 million in 2019, Li said.

Demand for steel in the construction industry is expected to rise 11.2% this year to 478 million tonnes. But it is seen slipping 0.6% to 475 million tonnes in 2020, Li said.

China produced 829.22 million tonnes of steel in the first 10 months of the year, up 7.4% from the same period last year. .

A rapid growth in output this year has stoked worries about China’s years of efforts to cut over-capacity, leading to a joint probe on production capacity at its steel mills by the National Development and Reform Commission and other government entities in November.

The research body also anticipated iron ore demand in China to reach 1.225 billion tonnes in 2020 and 1.264 billion tonnes in 2019.

That seems about right to me. After all, how do you grow this:

When credit is only a minor tailwind:

Which leads me to wonder if 2019 won’t be peak steel for China long term as scrap keeps rising:

And, given iron ore imports have already peaked:

One wonders if the 2019 iron ore price surge will be the highest point for a very long time to come.

David Llewellyn-Smith
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