Recently, the Metallurgical Industry Planning and Research Institute released two reports, "China's Steel demand Forecast results in 2020" and "Global Steel demand Forecast results in 2020", which forecast the total steel demand, variety structure and related raw material demand in major regions and countries around the world, so as to provide reference for accurately grasping the development direction, total demand and variety structure adjustment of China's iron and steel industry.
Global economic growth downside risks remain
The report said that in 2019, the overall global economic growth showed a downward trend. Major economies are slowing down simultaneously, the US economy is showing signs of slowing down, the European economic outlook is still bleak, and the economic performance of some emerging economies has improved slightly, but the potential risks cannot be ignored. In the face of downward pressure on the economy, monetary policy in major economies shifted from tightening to easing. The global economy will remain heavily influenced by U.S. policy in 2020 and downward pressure remains. Among the developed economies, the stimulus effect of US fiscal policy on the economy has been weakened, coupled with the slowdown in manufacturing growth due to trade frictions, the future economic growth of the United States will still weaken; affected by the slowdown in global trade and industrial production growth and the sharp slowdown in the growth of the working-age population, the economic growth of the euro zone and Japan is lower than expected. Emerging market and developing economies will drive global growth, thanks to the recovery of countries such as Iran, Turkey, Brazil, Mexico, Russia and Saudi Arabia. However, trade and geopolitical tensions have intensified, and the risks associated with Brexit may further affect global economic development and undermine the fragile economic recovery of emerging markets and developing economies and the euro zone. Global economic development in 2020 There is still greater uncertainty.
Overall global steel demand rises slightly
The report's analysis of the economic development and steel demand of the world and Asia, Europe, CIS, North America, South America, Africa, the Middle East and Oceania shows that the global steel consumption in 2019 is about 1.781 billion tons, an increase of 4.1; in 2020, the global steel demand is about 1.802 billion tons, an increase of 1.2. From the forecast data, the global steel consumption pattern will not change much in 2019 and 2020. Among them, the proportion of steel consumption in Asia still ranks first in the world, and its consumption proportion has dropped from 69.0 in 2019 to 68.9 in 2020; the proportion of steel consumption in Europe and North America ranks second and third in the world respectively, and the proportion of steel consumption in Europe in 2020 Compared with 2019, it increased by 0.1 percentage points, and the proportion of steel consumption in North America was the same as in 2019.
In the case of Asia, global trade and investment continued to weaken in 2019, with Asian growth slowing and risks skewed to the downside, but Asia remained the fastest growing region in the world. Asia will remain the engine of global economic growth for some time to come, but in the context of a synchronized global economic slowdown, especially further tariff increases and broader trade protectionist threats that could have a negative impact on the region's economies, the downside risks to economic growth are increasing. According to the economic development trend of Asia and the economic development of China, India, Japan and ASEAN countries, the consumption of steel in Asia is expected to be 1.228 billion tons in 2019, up 6.6 percent year-on-year; the demand for steel in Asia is predicted to be 1.241 billion tons in 2020, up 1.1 percent year-on-year.
From the perspective of Europe, the momentum of European economic growth has weakened due to the geopolitical situation and escalating trade tensions. In response to economic changes and stimulate economic growth, the European Central Bank restarted its quantitative easing monetary policy and asset purchase program, and began to implement interest rate grading. Affected by Brexit and trade protection policies, there is still greater uncertainty about economic growth in Europe in the future, and economic growth will slow down. Based on European economic development, European steel consumption is expected to be 0.202 billion tonnes in 2019, down 3.3 per cent year-on-year, and European steel demand is forecast to be 0.205 billion tonnes in 2020, up 1.5 per cent year-on-year.
From the perspective of the CIS countries, in 2019, driven by the growth of investment in Russia and Ukraine, the CIS economic growth rate will reach 1.8. Affected by economic factors, and considering the development of manufacturing industry and the acceleration of real estate construction in some CIS countries, the demand for steel in CIS is expected to show an upward trend. CIS steel consumption is expected to be 56.8 million tons in 2019, up 3.3 percent year-on-year; CIS steel demand is forecast to be 57.8 million tons in 2020, up 1.8 percent year-on-year.
In the case of North America, in 2019, the developed economies of North America grew steadily, and among the three major economies in North America, the U.S. economy grew less than expected due to trade frictions. In 2020, U. S.-China trade tensions will continue and U.S. manufacturing will be relatively weak. The Canadian economy is too dependent on the US market. Affected by the policies of the US economy and the return of manufacturing, the Canadian economy is facing greater pressure. According to the current economic development status and prospects of major countries in North America this year and next, steel consumption in North America is expected to be 0.152 billion tons in 2019, up 0.7 percent year-on-year; steel demand is forecast to be 0.153 billion tons in 2020, up 0.9 percent year-on-year.
From the perspective of South America, the economy of South America will decline in 2019 due to lower raw material prices in the international market, lower export demand and fluctuations in financial markets. In 2020, the South American economy will recover. Steel consumption in South America is expected to be 43.7 million tons in 2019, down 0.7 percent year-on-year, and steel demand in South America is forecast to be 45 million tons in 2020, up 3 percent year-on-year.
In the case of Africa, the region's economy as a whole maintained growth in 2019, but at a slower rate. In the future, infrastructure construction in Africa will continue to operate at a high level, and the manufacturing industry represented by mechanical processing and other fields will be better developed. It is estimated that the consumption of steel in Africa will be 36 million tons in 2019, which is basically the same as that in 2018; the demand for steel in Africa is predicted to be 37 million tons in 2020, with a year-on-year growth of 2.8.
In the case of the Middle East, since 2019, regional conflicts and turmoil have intensified, great power games and regional power divisions have accelerated the adjustment of the geopolitical landscape. The development and reform of countries in the Middle East are facing many difficulties. Economic growth in the Middle East will pick up in 2020. Steel consumption in the Middle East is expected to be 55.5 million tons in 2019, down 3.5 percent year-on-year, and steel demand in the Middle East is forecast to be 56 million tons in 2020, up 0.9 percent year-on-year.
From the perspective of Oceania, Australia's mining industry continued to expand, achieving growth for 15 consecutive years, but due to the global economy, economic growth declined significantly in 2019. The Australian Federal Budget for the 2019-2020 fiscal year will increase investment in infrastructure construction; New Zealand's sufficient fiscal surplus and low debt ratio will provide guarantee and impetus for future economic development, leaving more room for the government to expand infrastructure investment. Oceania steel consumption is expected to be 6.5 million tons in 2019, the same as the previous year; Oceania steel demand is forecast to be 6.6 million tons in 2020, an increase of 1.5.
Domestic economic counter-cyclical adjustment is generally stable.
In 2019, the growth of the global economy and international trade slowed, and downward pressure on the domestic economy increased. The state has introduced a series of counter-cyclical adjustment policies, which have better withstood the downward pressure on the economy and the overall economic operation is stable.
According to the analysis of the report, multiple factors at home and abroad will jointly affect China's economic development in 2020.
From the perspective of global economic development, the favorable factors are: the downward pressure on global economic growth has increased, but the policy support has increased. The slowdown in global economic growth is forecast to weaken in 2020, moving towards a gradual bottoming out and stabilization. The unfavorable factors are: the global economic growth momentum has been weakened, uncertainties and unstable factors have increased, and economic downside risks have increased. The overall slowdown in economic growth in developed economies is expected to continue in 2020. The economies of emerging economies and developing countries will also face many challenges. The trend of "slowing down and increasing quality" of China's economy continues. It is difficult for India's economy to become a new engine in the short term, and it is more difficult for other emerging economies to drive the recovery of emerging markets. The future growth rate of emerging markets may be weaker than market expectations.
From the perspective of domestic economic development, the favorable factors are: my country's economic development has huge resilience, potential and room for maneuver, the huge domestic market will continue to release demand-driven power, the deepening reform and opening up will further stimulate economic vitality, and sufficient macro-control measures And capabilities will create a stable development environment. It is expected that in 2020, the country will increase counter-cyclical adjustment policies, accelerate investment in key areas, and maintain moderately loose fiscal and monetary policies to ensure that economic growth remains within a reasonable range. At the same time, the construction of a modern economic system is accelerating, the high-quality development trend of agriculture, manufacturing, and service industries is taking shape, and a regional economic layout with complementary advantages and high-quality development is being constructed. The disadvantages are: China's economic development is facing many challenges, the downward pressure on the domestic economy is increasing, the growth rate of consumption is slowing down, and the growth of effective investment is weak. The quality and efficiency of domestic economic development are not high. Some outstanding problems affecting China's economic development have not yet been solved, such as more difficulties in the real economy, weak ability of independent innovation, large contradictions between fiscal revenue and expenditure in some places, difficulties in poverty alleviation in deeply impoverished areas and heavy tasks, and severe situation of ecological environment protection and pollution prevention and control, which will inhibit the stable growth of domestic economy. In addition, there is great uncertainty about the direction of Sino-US trade friction, which will affect exports and economic growth.
Forecast 2020 steel raw material demand decline
The report data shows that in 2019, benefiting from the steady growth of the domestic economy, my country's steel consumption in major downstream industries such as construction, machinery, energy, and home appliances maintained a good growth trend, promoting the overall rapid growth of my country's steel consumption. On the whole, China's steel consumption in 2019 was 0.886 billion tons, up 7.3 percent year-on-year.
The report uses the steel consumption coefficient method and the downstream industry consumption method to forecast China's steel demand in 2020, China's steel demand for 0.881 billion tons, down 0.6 percent year-on-year. The report believes that in 2020, my country's economy will generally maintain a stable development trend, but the growth rate may further decline. The demand for steel in the construction, automobile, shipbuilding and other industries will decline, the demand for steel in the machinery industry will remain basically unchanged, and the demand for steel in the energy, home appliances and other industries will remain Will maintain growth.
The report predicts that in 2020, China's crude steel output will be about 0.981 billion tons, and the net export of steel will be 51 million tons, up 6.5 percent and down 0.7 percent respectively. pig iron production was 0.775 billion tons, down 3.1 percent year-on-year.
In terms of demand for steel raw materials, in 2020, pig iron production is forecast to be about 0.775 billion tons, and it is estimated that 1.225 billion tons of iron ore (finished ore, discounted grade TFe:62%) will be consumed, down 3.1 percent year-on-year. Based on the reduction in demand for ironmaking coke, flat export coke, other industries such as non-ferrous flat, chemical, machinery slightly decreased and many other factors, the forecast 2020 coke production of about 0.442 billion tons, down 4.9 percent year-on-year. The coking industry consumes about 0.55 billion tons of coking clean coal, equivalent to about 1 billion tons of raw coal.
