People Daily Online reported that demand for steel in China is expected to rise 4.1% in 2013, as the nation's economic growth gets back on track.
The 2013 China Steel Demand Forecast also predicted a decline in iron ore prices due to increasing supplies and slow growth in the global manufacturing sector.
The report, released on Tuesday by the China Metallurgical Industry Planning and Research Institute, forecast that steel demand in China will reach 666 million metric tonnes in 2013.
Actual consumption of steel in China was 640 million tons in 2012, an increase of 3.6% on the previous year.
Crude steel output in 2013 will reach 746 million tonnes, up 4.2%. The report said the figure for 2012 is estimated to be 716 million tonnes, up 4.5% YoY
Mr Li Xinchuang head of the institute, said the positive factors creating the conditions for the increase in demand include new consumption-stimulating policies, fast-growing investment from the private sector, and rapid urbanization.
But he warned that the industry will continue to be haunted by overcapacity and narrowing profit margins, as well as rising labor and costs, and a weak global economy.
The report said that in 2012, steel's downstream industries such as mechanical and home appliances slowed their development, with shipbuilding and containers experiencing negative growth.
The report estimated that most of the industries will keep growing in 2013, apart from containers and home appliances, which will see flat growth, and the shipbuilding industry, which will continue to decline.
The report also forecast iron ore demand of 1.1 billion tonnes in 2013, a year on year rise of 4%. Of this, imported iron ore will account for more than 60%. Iron ore imports are expected to reach 760 million tonnes in 2013.
