EXPORTS of steel products may continue to fall this year due to strong domestic demand and reductions in capacity due to environmental commitments, the chairman of State-owned Fujian Sangang Group Co. said.

The prediction follows a 30.5-percent plunge in Chinese steel exports last year to 75.43 million tons, as strong domestic prices and high profits at home led to a drop in shipments abroad.

The supply and demand trends are now more in line following the supply-side reforms “while most of the downstream sectors have shown signs of recovery,” Li Lizhang said Saturday.

Demand from property, infrastructure, manufacturing and shipbuilding sectors will increase, he said, while steel supply would also see small pickup this year compared to 2017.

China, the world’s top steel maker, produced 831.73 million tons of crude steel last year. It aims to eliminate around 30 million tons of excess capacity as part of the government’s steadfast effort to curb air pollution.

Cities across the country are carrying out stringent measures to lower fine particulate matter (PM2.5) readings. The steelmaking hub of Tangshan said it will extend production restrictions for another eight months after current curbs expire next week.

Li said production curbs would not be limited to the smog-prone region of Beijing-Tianjin-Hebei: “Other regions will also see restrictions if pollution levels exceed the limits.”

Despite this, steel prices would not see a big fluctuation, he said, as steel mills have already prepared for “the new normal.”

(SD-Agencies)