Looking forward to the Chinese steel market demand situation of structural steel pipe in the New Year, its total consumption continues to be robust, there is still room for growth after the step of 1 billion tons, but due to a variety of factors, the demand growth rate will be significantly reduced. According to preliminary estimates, China's total crude steel demand is expected to exceed 1.03 billion tons in 2020, an increase of more than 3% and at least 3 percentage points lower than the growth rate in 2019. The apparent consumption of crude steel in China is about 960 million tons, an increase of more than 4%.Crude steel exports (converted from steel exports) about 70 million tons.
In 2019, China's total demand for steel (including exports, the same below) is growing strongly, with crude steel approaching or reaching 1 billion tons.After jumping to this new level, China's steel demand volume of mild steel tube will expand. China's total crude steel demand is expected to exceed 1.03 billion tons in 2020, an increase of more than 3%. China's steel and steel demand continued to grow in the New Year, mainly driven by three forces: First, investment in fixed assets, especially infrastructure investment to "strengthen weak links", is growing rapidly. Downward pressure on the domestic and foreign economies will still exist in 2020. To this end, policy makers will strengthen counter-cyclical adjustment and focus on stimulating end consumption and "shoring up weak spots" fixed asset investment. Since 2019, relevant departments have repeatedly "cut interest rates" in a disguised way, launched large-scale issuance of ultra-long-term local government bonds, and reduced taxes and fees. At the same time, real estate investment is still running at a high level, and overseas funds are accelerating their entry. Therefore, it is expected that the growth rate of national fixed asset investment, especially the growth rate of infrastructure investment, will increase in 2020, which will generate more steel demand such as China hollow section tube.
Second, foreign trade exports are likely to improve. The rise of global trade protectionism in 2019, especially the "trade war" initiated by the US trump administration, has already harmed global trade and economic growth, including the US itself facing the risk of economic recession. In order to get out of the recession crisis, the "trade war" is likely to be temporarily suspended within a New Year. Moreover, major countries in the world have started a new round of monetary easing. While cutting interest rates, they have resumed QE one after another and coordinated with proactive fiscal policies. The federal reserve has also cut interest rates twice in a row. As a result, global economic growth of galvanized steel pipe is expected to recover in 2020.
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