QINGDAO, China (Reuters) - Demand for steel in China, the world’s top consumer, is expected to rise 3 percent to 4 percent this year, with consumption better than expected, a senior official of the China Iron and Steel Association (CISA) said on Wednesday.
“We expect consumption for steel products this year to grow 3-4 percent,” Wang Liqun, vice chairman at CISA told an industry conference.
China’s infrastructure push has spurred steel demand this year, lifting profit margins at producers to the highest in years and steel production to record levels.
Despite Beijing’s efforts to cut excess capacity in its bloated steel sector, the country’s output of the building material is forecast to rise to 840 million tonnes this year from 808 million tonnes in 2016, CISA said earlier this month.
In slashing excess capacity, China has also tightened its environmental protection rules as it fights smog, in the process weeding out smaller steel producers and allowing bigger players to dominate the sector.
The environmental inspection “is a fundamental policy in China and will have impact on prices and production,” said CISA’s Wang.
But Wang said Chinese steel mills should “not over-interpret” the policy implemented by the Ministry of Environmental Protection.
Reporting by Muyu Xu and Manolo Serapio Jr.; Editing by Richard Pullin and Kenneth Maxwell