The demand for steel is the money purchase demand that determines the production of China's steel enterprises. This demand includes both domestic production and construction needs, as well as export trade needs.

China has always been one of the countries with the largest demand for steel, which is used in construction, machine parts, various mechanical equipment, mold and mold parts manufacturing, shipbuilding, hardware tools, and other special fields such as aviation and mold manufacturing also require the use of special materials such as steel. For example, heat-resistant die-casting hot work steel/high wear resistance, fatigue resistance hot work steel/special toughness hot work steel/mold steel/pre hardened plastic mold steel/high hardness and high polishing mirror plastic mold steel/corrosion resistant mirror mold steel

How will the demand for steel (materials required for molds) in China move forward in the future? There is a view in the industry that China's crude steel demand has entered the so-called "arc top zone", and the crude steel demand has reached its peak in the past few years. At present and in the future, the apparent consumption is a stage of gradual reduction, down to 600 million tons. This view seriously underestimates China's steel demand, which will lead to a serious miscalculation of China Steel's steel development strategy. According to statistical data, the apparent consumption of steel in China in the first four months of 2017 was 25.03 million tons, a year-on-year increase of 11.5%. Looking ahead to the steel demand in the second half of the year, it is expected that the steady state of the national macroeconomic L-type enterprises will remain, and the recovery trend of major economic indicators such as fixed assets investment, industrial production and foreign trade will remain unchanged. Affected by this, it is expected that the annual apparent consumption of crude steel will reach or exceed 750 million tons, an increase of more than 5% or even 8% compared to the previous year, greatly accelerating the growth level. How can this lead to reduced development?

If we add in about 90 million tons of crude steel exports in 2017 (estimated to be converted into exported steel) and take into account the continued decline in social inventory levels, it is expected that the total demand for crude steel in China will reach or approach 900 million tons in 2017, an increase of more than 4% compared to the previous year, and there is no possibility of an absolute decrease in quantity. Moreover, driven by some long-term factors, China's annual peak consumption of crude steel in the future will exceed 1 billion tons, or even reach 1.2 billion tons.

The reason why China's crude steel demand will continue to grow in the future, surpassing the 900 million ton and 1 billion ton levels one after another, is mainly driven by the following five factors.

1： It is a trend of urbanization in China. Nowadays, China is in a stage of rapid urbanization, with a large number of economic industries and population concentrated in existing cities, especially first tier cities, resulting in some cities being too large and experiencing rapid population growth, resulting in frequent smog, traffic congestion, environmental pollution and other major urban problems. To this end, it is necessary to create new and adequately sized urban spaces in suitable locations outside existing large cities to undertake regional agglomeration of economic industries and population. It can be predicted that due to the promotion of China's urbanization trend, more "New areas" may emerge in the future, creating dozens of new cities with a population of more than one million, so as to realize hundreds of millions of rural people entering the city, realize China's economic transformation, and realize the balanced development of all regions in the country. This has added enormous potential to China's steel demand, especially for billions of tons of construction steel.

2： It is the emergence of new technologies and projects with extremely high steel consumption and strength. For example, the upsurge of high-speed railway construction in China, the large-scale construction of urban rail transit, and the widespread deployment of reinforced cement and steel structure buildings have resulted in a much higher steel consumption per unit area than ordinary railways, ordinary roads, brick concrete structures and soil structure houses, which has greatly increased the steel consumption of fixed assets investment. This will also generate an additional huge demand for steel.

Thirdly, China's industrialization process has been significantly shortened compared to Western countries. With the help of latecomer advantages and other factors, China may have to complete the industrialization and urbanization process achieved by Western countries over the past 100 years within 30-50 years, which is only one-third or half of the process of Western countries. This leads to a significant increase in the annual steel consumption intensity, while the total demand remains unchanged, thus greatly increasing the peak steel consumption in China.

4： China has a large population base. At present, China has a population of 1.3 billion, of which the number of the middle class is on a par with the total population of Western countries, especially the emergence of new consumer groups after the 1980s, 1990s and 2000s. The new consumption concept and Consumer behaviour have led to a "blowout" in almost all of China's commodity consumption, including steel consumption.

5： It is the global infrastructure construction that requires Chinese steel. According to international authoritative institutions, the current global infrastructure investment debt is as high as billions of dollars. If China's "the Belt and Road" construction leads to a global infrastructure construction climax, and because the world's steel production capacity is mainly in China today, there is bound to be a huge demand for Chinese steel, including direct exports and indirect exports. According to statistics, China exported 108.43 million tons of steel in 2016. In the first four months of 2017, China's steel export volume was 27.21 million tons, equivalent to approximately 28.64 million tons of crude steel. Although the growth rate has slowed down, it is still a relatively large quantity and scale. Due to the continued recovery of the world economy, global steel demand has continued to increase, and the reduction in Chinese steel exports may push up international market steel prices, making steel exports profitable again. Affected by this, it is expected that China's steel exports may rebound in the second half of the year, with annual exports reaching or exceeding 80 million tons, equivalent to nearly 90 million tons of crude steel. Based on this, it is predicted that if the global infrastructure construction peak rises, China's steel export peak may reach or approach 200 million tons in the future, thereby increasing China's peak demand for crude steel.

From this, it can be seen that the peak demand for steel in China will continue to increase due to the above five factors. In this regard, China's steel industry should prepare and plan in advance in many aspects, such as raw material guarantee, environmental protection, industrial layout and enterprises' going global.