Slowing economic growth in China, concentrated on the heavy industrial and real estate sectors alongside plunging commodity prices, has generated considerable debate about the structural challenges confronting the ferrous metals complex, inside China and without. One key question in this debate is whether China has reached the developmental milestone known colloquially as "peak steel".

What is peak steel? Crudely (no pun intended), peak steel reveals itself with hindsight as the year in which appropriately scaled output (hereafter "steel intensity") was clearly at its maximum level. Using output per capita, the US hit peak steel in 1955; Europe in 1970; Australia in 1975; Japan in 1980; Russia in 1985. Whether or not "China 2013" can be added to that list in the wake of the first annual decline in steel output per capita in the reform era is a credible subject.

Steel intensity traces an upside-down "U" shape over the full course of an individual economy's industrialisation. The high point of the upside-down "U" – i.e. peak steel – tends to occur sometime during the middle-income stage of development. That much is simple, clear and, to a degree, generalisable.

That is the point of departure where certainty ends and speculation begins. The precise shape of this curve for an individual economy – the gradient of the upswing, the timing and height of the peak, and the gradient of the downswing – tends to be idiosyncratic. This diversity reflects varied natural resource endowments, the wide range of development strategies pursued, varied international institutional backdrops during a country's high-growth phase, and a range of other country-and-or-time-specific matters.

Forecasting the time-path of steel intensity in a single country is thus a complex task best approached with humility and trepidation. In China's case, the task is not just complex but intimidating. Students of comparative economic history will know that China's most common status in cross-country scatter plots is that of "outlier". Outliers, by definition, do not conform to the central tendency.

Here, then, are some facts. China produced 823 million tonnes of steel in 2014, equivalent to 601 kilograms per head, at a GDP per capita of close to $10,000 (1990 international dollars). At the end of 2013, the local industry association estimated that China had the capacity to produce 1.1 billion tonnes, or 813kg per head. Ergo, projections that anticipate that China's future steel output will peak at 1 billion tonnes are implicitly assuming a steady rise in the utilisation of existing capacity, from around 74 per cent today to 79 per cent in the 2020s.

It is important to realise that the one billion tonne forecast does not require a single yuan in net new capex. And an implied future capacity utilisation rate of 79 per cent does not look outlandish relative to an average of 82.2 per cent so far this century. That is the good news for those still adhering to the one billion target. It is physically possible. The bad news for this group of adherents is, well, the demand side. Or, more bluntly, just about everything else.

It is popular to assess the concepts of "peak steel" and "peak housing" alongside one another. This is an intuitive thing to do as construction accounts for two-thirds of China's steel use and housing is the major single element of construction. A working definition of "peak housing" is the year in which value-added from construction was clearly at its maximum level as a share of GDP. Once again, here are the facts. Value-added from construction accounted for around 6.6 per cent of Chinese GDP in 2014. That is slightly lower than in 2013, but not far from the post-1993 average of 6.0 per cent. The highest levels of this metric in the post-WWII histories of Japan (10.8 per cent) and South Korea (9.3 per cent) are in a different league to China's. There may be a case, then, that "peak housing" may not have been reached. The counter-view is that the enthusiasm of China's property developers has brought construction activity forward by many years, robbing the future for a super-charged yesterday.

In conclusion, I would echo Zhou Enlai's famous assessment of the French Revolution and state that it is still too early to tell if China reached "peak steel" in 2013. What can be said more definitively is that the weight of evidence is tilting heavily against the one billion-tonne target.

Huw McKay is a senior international economist at Westpac Economics.