Platts Analytics presents two scenarios for property steel demand, both of which indicate there will be no growth from the sector this year. (See table below.)
An upper range scenario would see the addition of just 6.07 million mt of steel compared with 2020, marking a 1.9% increase to 328.2 million mt. Platts Analytics' lower range estimate sees a decrease of 8.68 million mt to 313.4 million mt, marking a 2.7% fall.
The last time steel demand from the property sector declined was in 2015. Property accounts for 30%-35% of China's total steel consumption.
Based on S&P Global Ratings' forecast that China's GDP will grow 7% this year, property new starts and sales in 2021 will be down by 6.4% and 2.8% year on year, respectively.
If China chases GDP growth of 8% or above, property new starts and sales will be up 0.4% and 4.6% on year, according to Platts Analytics.
Achieving 8% growth would require looser credit conditions and even some easing of constraints on the property sector.
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