According to a report released by China Iron and Steel Association, the fundamentals of China steel market will be little changed next year.

Global apparent consumption of steel products will post an increase of 3.1% to 1.475 billion tonnes in 2013 and the growth rate might be 2.0% higher than 2012, as per forecast from World Steel Association. The figure might be 1.523 million tonnes in 2014, a rise of 3.3%. Mainland China will register a growth of 3% on the high base.

Chinese central government timely put forward to take stable growth as the priority and insist on the development mode that investment growth is key when GDP growth retreated in the second quarter of this year. Therefore, the country strengthened efforts on rail transit, environmental protection, machinery manufacturing, indemnificatory housing construction, auto and home appliance industry, which brought GDP growth in the third quarter to 7.8%.

Furthermore, crude steel production resumed to a high rate growth of 8%. According to steel demand in the first three quarters, it is expected that China crude steel production might be 780 million tonnes in 2013, a rise of 9% year on year; apparent consumption of crude steel will reach 730 million tonnes, up 8.9% from a year earlier. Chinese steel supply and demand might achieve basis balance in 2013 as CISA predicted sales-output ratio of large and medium-sized steel mills to be 99%.

As the problems of China industry such as low concentration rate, overcapacity, high energy consumption and environmental protection could not be casted off overnight, the effects of macro control are hardly to fully pay off within two or three years. It is predicted that the fundamentals of China steel market will be little changed next year.

China's crude steel production might be 800 million tonnes and apparent crude steel consumption will reach 760 million tonnes in 2014, a rise of 3% respectively compared to 2013.

According to statistics, the frequency of steel price fluctuation becomes faster and faster but the range is smaller and smaller since wire rod and rebar futures launched on March 27, 2013.

On balance, China steel market is expected to keep flat next year with faster fluctuation frequency and smaller range against the backdrop of a new round of reform and development.