Steel consumption estimated at 693m tons in '13

BEIJING -- China's crude steel consumption for 2013 is estimated at 693 million tons and it is expected to grow 3.2 percent year-on-year to reach 715 million tons in 2014, an industry expert said on Friday.

Given China's current production capacity, the debt-laden steel industry will continue to struggle with overcapacity, said Li Xinchuang, head of the China Metallurgical Industry Planning and Research Institute.

China is the world's biggest steel consumer and producer. In the last several years, China's iron and steel sector has been pummeled by weak demand and falling prices and suffered greatly from overcapacity.

Li said decelerated growth of downstream sectors, including machinery, electrical appliances and containers, is the major reason behind the slowdown of steel consumption growth in China.

China's steel demand in 2014 is set to edge up marginally, as the Chinese economy is unlikely to have a significant turnaround next year, he said.

According to Li, of the eight downstream sectors that determine steel demand, the railway and automobile industries are expected to post the biggest growth in steel consumption in 2014, forecast at 8.3 percent and 8.0 percent year-on-year, respectively.

Steel demand next year from machinery and household appliances is expected to rise by 5.3 percent and 5.0 percent year-on-year, respectively. Steel demand from the energy, construction and container sectors is likely to edge up slightly.

Steel demand from ship-building could stay flat in 2014 due to the depression of the global shipping market.

Li also said that the world's iron ore prices would remain high next year. China's demand for finished iron ore in 2014 is forecast at 1.172 billion tons, with more than 70 percent imported.