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Sep.22.2020 1USD=6.7595RMB
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Wu Wenzhang: Basic Perspective on China 2020 Steel Market

//en.steelhome.cn [SteelHome] 2019-11-05 14:38:08

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China Steel Industry Summit for 2020 Market hosted by SteelHome, was successfully held in Xiaoshan District, Hangzhou City, Zhejiang Province, during November 1-3, 2019. This summit was jointly held by Maanshan Steel Company, Ouyeel Co., Ltd and Youfa Pipe Group. Co-hosts were Shanghai Futures Exchange, Dalian Commodity Exchange, Xiamen C&D, China Minmetals Corporation, GTXsteel E-commerce and Henan Gang Duo Industrial. Over 1000 delegates from governments, associations, steel mills, miners, traders, research institutes and media attended the event.

Mr.Wu Wenzhang, Founder of SteelHome, Board Chairman & President with SteelHome, delivered a speech titled Basic Perspective on China 2020 Steel Market on the morning of November 2.

Mr.Wu delivered keynote speech on the morning of November 2


1. World economic growth will slow down in 2020. Non-China steel production and demand will be basically flat with 2018.

2. SteelHome predicts that Chinese economic growth in 2020 will be around 6%; Chinese crude steel consumption will fall around 20 million tons from 2019, mainly dragged down by property sector; infrastructure construction and manufacturing investment will be driving forces in 2020.

3. Chinese price is higher than international one because of weak demand. Traditional exporting area in China sees quick rise in steel capacity. The export in 2020 is hardly to increase. Then China will face up with oversupply.

4. In 2020, oversupply in Chinese domestic market will worsen. The balance in domestic market will be determined by world economic situation and Chinas export shipments. Domestic steel supply/demand balance will be met if Chinese crude steel production in 2020 is controlled within 960-970 million tons.

5. Based on crude steel production target in 2020, Chinese pig iron production should be 786-795 million tons, down 2 percent on year. In 2020, top four miners and Anglo American are predicted to produce 1.23 billion tons of iron ore, an increment of 59.68 million tons over 2019, almost the same with 2018.

6. Quick increase in coke production in major producing areas, falling coke export and shrinking profitability in steel enterprises result into weakness in coke market price in 2019. The supply/demand in 2020 will be determined by backward capacity elimination and super-low emission.

7. SteelHome predicts that average price of rebar (take Shanghai for example), in 2020 will be 3600 RMB per ton, that of HRC will be 3500 RMB per ton, with average price falling by 200 yuan from 2019.

(To contact the reporter on this story: tina.tong@steelhome.cn or 86-21-50585733)
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