China steel exports to remain elevated in 2017: Fitch

Consumption expected to stay at 700-705m MT.

Fitch Ratings expects Chinese steel exports to remain at around 100 million metric tons (Mt) in 2017, due to flat 'apparent' consumption and slow capacity rationalisation.

Fitch expects Chinese apparent steel consumption to remain between 700-705 million Mt, reflecting decelerating property growth, stable infrastructure investment growth, and a favourable outlook for Chinese automobile and appliance consumptions.

"On the other hand, we expect capacity rationalisation to remain a key theme of the sector, with a target of 14 million-27 million Mt per annum until 2020. As a result, exports should remain high in 2017 as Chinese producers continue to benefit from a cheaper yuan and lower raw-material prices," it notes.

The rating agency also expects additional state-backed consolidation in the next few years as government executes its plans for supply-side reform, leading to potentially enhanced government linkages between these companies and the state.