China Tells

China’s steel production capacity has been increasing in the recent years (See Graph from Chinatells). Such a growth has aroused concerns on the overcapacity of steel production in China. It seems that whether the economy can absorb such capacity depends on the outlook of two main industries: property and infrastructure. Property construction and Infrastructure (railway, Road and airports) account for about 25% of the country’s demand of steel respectively. Based on the estimate that both sectors might continue to grow at 20% plus next year, they are expected to contribute most to the consumption of steels. The other sectors with healthy growth expectation that might contribute to the consumption of steels are auto (3% demand with 37% growth outlook), shipping/energy/transport, and white goods. Despite the fact that machinery accounts for about 16% of the total demand of steel, it is not expected to generate any positive contribution as the sloth in export might continue to slow down the demand outlook.

中国钢铁产量连年增长，如何消化这些产能遂成为很多经济学家关心的问题之一。目前看来最有可能消化增长的钢铁产能的就是房地产和基建产业。房地产和基建加起来占了钢铁需求的一半之强，加上明年对房地产和基建行业的增长仍然看好，因此两个行业应该各对钢铁需求提供5%左右的增长需求。汽车行业对钢铁的总体需求仅3%左右，但是由于其快速的增长潜能，因此也有望撑起半边天。