Slowing investments in property and a weakening manufacturing sector have dragged down Chinese steel demand this year, and the next year doesn’t look any better, according to an industry report.
The report by the China Metallurgical Industry Planning and Research Institute said Chinese domestic demand for steel will fall by 4.8 percent year on year to 668 million tonnes in 2015, the first ever annual decline since 1995.
Demand will continue to shrink in 2016, dropping a further 3 percent year on year to 648 million tonnes, said the report.
Globally, the world steel demand will fall by 2 percent in 2015 and 0.9 percent in 2016 to 1.51 billion tonnes and 1.5 billion tonnes, respectively.
Slowing steel demand has in turn reduced profits for steel makers and forced small players to exit the market. China’s large and medium-sized steel mills suffered a loss of 72 billion yuan (11.34 billion U.S. dollars) in the first ten months of 2015, according to China Iron and Steel Association (CISA).