China produced almost 1 billion tons of steel in 2019

China's economy stabilized towards the end of the year. This is at least indicated by the economic data published today by the National Statistics Office (NBS). Industrial production and plant investments in December were (significantly) above expectations. As expected, the entire economy grew by 6% in the fourth quarter. For 2019 as a whole, the NBS reports GDP growth of 6.1%. This is the lowest growth rate in almost 30 years and shows that the Chinese government is continuing to cool the economy in a controlled manner. Specific goals for 2020 will be announced at the National People's Congress in early March. Metal prices are still reacting relatively cautiously to the solid Chinese figures: they are only slightly firmer at the end of the week.

As also published this morning by the NBS, China produced a record amount of steel last year. The 1 billion tonne mark was only slightly missed. The good 996 million tons mean an increase of 8.3% compared to the previous year. According to the association of Chinese iron and steel producers, the high production is the result of robust steel demand, which is said to have increased by 6% in 2019. Demand was driven by the robust real estate market and infrastructure investments. Despite the high growth in demand, the Chinese steel market was oversupplied last year. According to media reports, China therefore wants to ban the construction of new production capacities and better monitor compliance with environmental regulations.

Source: Commerzbank Research, Photo: Fotolia