Chinese Steel Production and Consumption Surge

Article ID: 511684

Released: 10-May-2005 9:00 AM EDT

Source Newsroom: Worldwatch Institute

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Newswise — World trade in steel expanded sharply in 2004, influenced in large part by growth in the Chinese construction and manufacturing sectors, according to Vital Signs 2005, a Worldwatch Institute report published today.

Global production of crude steel increased 8.8 percent in 2004 (See charts for media use; downloadable at, the first year in which steel output passed the billion-ton threshold. Steel consumption closely shadows economic growth in general, and China's hot economy is expected to make it the driver in global use in the near term. Steel consumption in China is expected to increase by more than 10 percent in 2005, and this one nation is projected to account for 61 percent of total growth this year. By comparison, growth in the rest of the world is expected to be just over 2 percent.

China's appetite for steel is affecting economies elsewhere. In November 2004, the Nissan Motor Company had to close three assembly plants in Japan for five days because of a lack of steel. And a fire that shut down a mine in West Virginia that supplies coke, a coal that fuels blast furnaces, led to production cutbacks at U.S. Steel because other supplies were unavailable in the tight coke market.

The most widespread impact of Chinese steel consumption is in the price of steel and its inputs, which jumped by 50"70 percent in the last half of 2003 to near-record levels. The price of steel scrap, around $100 per ton in the 1999-2002 period, surged past $250 in 2003 as China increased its imports.

The International Monetary Fund expected the value of total world exports to reach $10.6 trillion in 2004, an increase of 15.3 percent over 2003. This would be the highest growth rate since 1995, when the value of exports rose 16.7 percent. Much of this increase can be attributed to China's growing influence in rising world trade.

China represented more than 20 percent of the increase in world trade volumes during 2004, and its share in world exports nearly doubled over the preceding four years, rising from 2.8 percent to 5.8 percent. Its performance continues to be fueled by its relatively recent accession to the World Trade Organization (WTO) as well as by rapid rates of investment and consumption.

China, the largest importer of soybeans, is expected to import 23 million tons in 2004/2005, more than twice as much as in 2001/2002. The volume of world soybean exports during 2004/2005 was expected to rise 16 percent over the previous year, reaching 65 million tons. The increase will be mainly in response to growth in soybean plantings spurred by a spike in soybean prices between mid-2003 and early 2004. This occurred because of droughts in the United States and Brazil—the two largest soybean producers—combined with increasing demand from China.

(References: Steel Surging, Vital Signs 2005, pp. 52-53, Figures 1 and 2; World Trade Rises Sharply, Vital Signs 2005, pp. 46-47, Figure 1)


"¢ Spokespersons List—A complete listing of all Vital Signs authors and their areas of expertise.

"¢ Vital Facts—Thought-provoking story ideas with facts, referenced back to the book's chapters.

"¢ What You Can Do—Ideas, links, and resources for addressing the issues discussed in Vital Signs.

"¢ Vital Signs 2005 Web Chat Series—View the complete schedule and introductions to each topic.

"¢ Vital Sign of the Week—Brief, compelling facts from individual Vital Signs chapters. Contact us to discuss adapting these for your news outlet. (Note: these will continue through December 2005.)

Purchasing Information: Vital Signs 2005 costs $16.95 ($24.00 in Canada) plus shipping and handling, and can be purchased through the Worldwatch website: or by calling 1.888.544.2303 (in US) or 1.570.320.2076 (in all other countries).

About the Worldwatch Institute: The Worldwatch Institute is an independent research organization based in Washington, DC. Through accessible, fact-based analysis of critical global issues, Worldwatch helps to inform people around the world about the complex interactions among people, nature, and economies. For more information, visit


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