According to foreign media reports on September 19th, it is reported that Rio Tinto Group, the world’s second-largest iron ore producer, believes that China’s steel consumption is nearing its peak, and demand next year may be similar to that in 2023.
In recent months, China’s demand for iron ore, the main raw material for steel production, has increased, as some bright spots in the Chinese economy have helped offset the weakness in demand from the key real estate sector.
However, Jakob Stausholm, CEO of Rio Tinto Group, stated that the rapid growth in steel consumption over the past 20 years may be coming to an end.
In an interview at Bloomberg headquarters in New York, he said, “We expect that China’s steel demand is approaching its peak.” “Not because the Chinese economy isn’t growing, but because it has matured.”
It is widely believed in the industry that after years of rapid growth, the Chinese steel market will contract in this decade. Rio Tinto’s competitor, BHP Group, estimates that Rio Tinto’s annual production has reached a stable level slightly above 1 billion tons and will continue until 2024. Analysts at Capital Economics Ltd. suggest that supply and demand may have peaked in 2020.
Iron ore prices reached their highest level since April last week and have remained above the $100 per ton mark for most of this year. Despite waves of concerning news from the real estate sector, which typically accounts for about 40% of demand in more typical years.
Singapore futures fell 1.5% to $119.95 per ton. Shanghai futures fell 1%, while Shanghai hot-rolled coil prices rose and rebar prices fell.