As per numbers from officials of China Iron and Steel Association last week, China’s demand for steel flattened out or even contracted in 2014 last year as apparent steel consumption, a measure of demand calculated by deducting exports from the sum of production and imports, posted a 3.4% YoY decline for 2014

Apparent steel consumption doesn’t take into account China’s massive steel inventories and after factoring in still incomplete data on those inventories, it’s likely that real consumption stayed flat or slightly declined may be not as much as 3.4% YoY

However, the decline is a sharp reversal from the 6% growth posted in 2013

The slowdown in the steel sector comes as economists warn that China may be nearing “peak steel,” a theoretical point in time when the nation’s demand for steel enters a long term decline. A 3.4% decline in steel consumption would place China’s current demand volume at 738 million tons, according to official data. Slowing beyond this point portends lower output and tighter employment, as steel jobs begin to shift overseas where costs are cheaper.

Recently, China has taken steps to shift from an investment driven economy, which favours heavy industry, to a consumption driven one against the backdrop of a broader slowdown in China, where growth hit its slowest rate in more than two decades at 7.4% in 2014 with sectors that consume steel, principally real estate, largely to blame.