[www.ferro-alloys.com]The nation's steel consumption is expected to rise by 7.7 percent to 725 million metric tons this year amid an improving economy and better performance of major steel consumers, an industry research and planning institute said on Dec 4.

The country's steel demand will grow by 0.7 percent to 730 million tons in 2018, said a report from the China Metallurgical Industry Planning and Research Institute.

China's crude steel output will increase by 3 percent year-on-year to 832 million tons in 2017, and by a further 0.7 percent to 838 million tons next year.

 Steel consumption expected to rise by 7.7%

Workers at a steel plant in Luoyang, Henan province. Huang Zhengwei / For China Daily

Iron ore demand in the world's top buyer is expected to rise by 1.3 percent to 1.12 billion tons in 2017 from last year and drop by 0.2 percent to 1.12 billion tons in 2018.

Major steel consumers, including real estate construction and the machinery, automobile, energy and shipbuilding industries, will be the main contributors to the country's rising steel demand next year, the report said.

Real estate construction will remain the biggest consumer of steel products next year, with demand amounting to 388 million tons, up by 0.3 percent from this year.

The machinery industry comes second with 138 million tons of expected steel demand in 2018, up by 1.5 percent year-on-year, followed by the automobile industry with 59.5 million tons, and energy with 32.5 million tons.

Li Xinchuang, president of the institute, says China will continue to cut outdated steel capacity and manufacture more green and high-quality steel products next year.

"China's steel manufacturing infrastructure is the most advanced in the world. The small and unregulated steel mills, which are producing substandard steel with high pollution, should be eliminated," Li says.

"The steel enterprises should increase their investment in research and development as well as environmental protection to maintain their competitiveness in the world," Li adds.

Earlier this year, the National Development and Reform Commission, the country's top economic planner, set a timeline to phase out production of low-quality steel made from scrap metal before the end of June.

Authorities have sent 12 inspection groups to some areas, including Hebei, Henan and Heilongjiang provinces and the Guangxi Zhuang autonomous region, to oversee the move, according to Lin Nianxiu, deputy head of the NDRC. China plans to reduce crude steel output by 100 million to 150 million tons by 2020.

More than 65 million tons of steel production capacity was phased out in 2016, beating the annual target. The country met the 2017 capacity reduction goal of 50 million tons by the end of August.

In 2016, the central government spent over 30 billion yuan ($4.5 billion; 3.8 billion euros; ￡3.4 billion) helping 726,000 workers who were made redundant in the steel and coal industries to find jobs. The number of workers who will receive aid this year is estimated at 500,000.                                                         **Article from Internet for reference only