The Coal Trader

Profits of Chinese steel mills will improve in 2024

On December 2, a CITIC Construction Investment research report pointed out that in the future, China’s crude steel consumption is less likely to decline significantly. This is because China is still in the process of urbanization and industrialization and requires a large amount of crude steel; moreover, with the expansion of application scenarios, the demand for steel as a basic material still has potential.

The promotion of prefabricated steel structures, the upgrading and expansion of the manufacturing industry, and the rapid development of the new energy field all support China’s steel consumption to remain at peak levels for a long time. In the short term, 2024 will be the year when strong fiscal effectiveness is released. The 1 trillion yuan special government bonds and special refinancing bonds will effectively alleviate funding problems and no longer limit the physical demand for infrastructure.

It is expected that in 2024, steel mill profits will be driven by the dual benefits of improved demand and falling costs, and are expected to fully unleash their elasticity.