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Citigroup: Xiong'an New District will boost China's annual steel demand by 14 million tons
This new grand plan for the establishment of the Xiong'an New District in China will drive demand for steel in China. Citigroup analysts said in a report released on Tuesday that if the plan is implemented within 10 years, China will need to consume 12 million to 14 million tons of steel per year...
2017-04-06 08:14 Source: [Steel News]
This new grand plan for the establishment of the Xiong'an New District in China will drive demand for steel in China. Citigroup analysts said in a report released on Tuesday that if the plan is implemented within 10 years, China will need to consume 12 million to 14 million tons of steel per year.
According to the World Steel Association, global crude steel production in 2016 is close to 1.63 billion tons. Despite this, China's steel demand will continue to maintain a high level of growth.
In recent years, the development of the global steel industry has been limited, and China is the world's largest steel producer and consumer. Due to overcapacity in China, China is subject to dumping review of steel as a commodity in the international market.
China announced the establishment of the Xiong'an New District on Saturday. The province's economic growth was hit by massive layoffs in heavy industry in Hebei Province. At present, China is shifting its economic growth focus from manufacturing to services.
Xi'an New District, Hebei Province, China is located in the core hinterland of the Beijing-Tianjin-Hebei region. It consists of Xiong County, Rongcheng and Anxin counties under the jurisdiction of Baoding City, Hebei Province. The initial area is 100 square kilometers and will be expanded to 2,000 square kilometers in the future.
Citigroup analysts said: "If the government wants to replicate the Shenzhen model within 10 years (twice the speed of Shenzhen), at least in terms of infrastructure, it will generate 12-14 million tons of steel demand per year, equivalent to 2% of China's domestic steel demand (about 700 million tons).
Shenzhen is China's special economic zone. It has transformed from a farmland in 1979 to a manufacturing center in China. Now it has grown into a business center. Citigroup said that in order to build a sound infrastructure and high-density urban buildings, Xiong'an will need 25 to 30 million tons of steel for residential infrastructure, and 35 to 40 million tons of steel for non-residential buildings, 3500 - 40 million tons of steel for transportation and logistics infrastructure, and 25 to 30 million tons of steel for other utility infrastructure.