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Beijing 2022 Olympic Winter Games Boost Demand for Steel

According to the Winter Olympic Committee’s plan, Beijing 2022 Olympic Winter Games will form three relatively agglomeration venue in Beijing, Zhangjiagang and Yanqing. Beijing is planning to build a high-speed railway to zhangjiakou, a total length of about 170 kilometers, the need to invest about 50 billion yuan. The project has been started, is expected to be completed by 2019. In addition to the railway, stadiums construction, the surrounding real estate projects, highway construction, bridge construction will boost demand for steel.

During 2016 to 2022, the planing facilities construction will  indirectly brought the demand for  55 million tons of construction steel per year, among which the housing construction demand 44 million tons, infrastructure construction demand is 11 million tons.

Analysts said, like venue, the construction of railways and other large infrastructural projects will mainly boost demand for constructin steel, but steel demand for steel structure,  special steel and other species will be greatly increased,  large and medium-sized steel enterprises will get benefit 

Demand for construction steel get increased substantially, at the same time, the capacity of steel is cutting in North China, especially in Hebei Province and surrounding and around Beijing. According to statistics crude steel output fell 27.3% year-on-year in the first half of this year in Beijing, the decline in the national ranking second, crude steel production in Tianjin also begin to fall in April this year, has continued for 3 months.

Nationalwide steel output also reduced. China’s total crude steel production in the first half of this year is 410 million tons, fell 1.3% year-on-year, China’s crude steel production has declined for five months year-on-year.

However, not all of the steel companies can get benefit in the Winter Olympic facilities constructions. Winter Olympic stadiums and related  infrastructure construction demand for  steel prefer to high-end products, coupled with environmental monitoring upgrade, large steel enterprises will get more benefit, small and medium sized steel enterprises will face pressure from elimination due to their outdated capacity.

There are tens thousands of steel companies in Beijing, Tianjin and Hebei Province, especially concentrated in the Hebei region,  the number of steel companies ranked first in the country, the size and competitiveness of their products is variable. There are more small-scale enterprises, their production line is relatively backward, and relatively low-end product specifications, can not meet the market demand, which are the main target of local government eliminated backward production capacity.

The next seven years, Hebei steel production capacity is expected to decline 38%, corporate concentration up to 45%.