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Demand for %Steel in China, the world’s second largest economy, is expected to remain weak throughout 2024 as a financial crisis continues to roil the country’s property sector.

Steel production within China fell below year-ago levels in March of this year as demand remains tepid in the nation of 1.4 billion people.

Analysts who cover the sector say steel production in the current second quarter is likely to be lower than a year earlier, pushing prices for iron ore lower as a result.

China's steel production declined 7.8% year-over-year in March to 88.27 million mt, taking total steel production in the first quarter to 256.55 million mt, down 1.9% from a year ago, according to data from the country’s National Bureau of Statistics.

China's domestic steel consumption in March fell 13% year-over-year to 77.93 million mt, according to S&P Global Commodity Insights.

For this year’s first quarter, domestic steel consumption in China decreased 6.3% to 218.81 million mt.

Weakness in China’s steel demand is due almost entirely to a slumping property sector and local governments downsizing infrastructure projects to reduce debt loads.

Consequently, China's blast furnace utilization rates are lower on the year and iron ore inventories across the nation are rising.

Iron ore inventories in China reached 145.16 million mt as of April 19, up 22% since the end of 2023. Current inventories of iron ore are at their highest level since April 2022.

Analysts expect any decline in China’s iron ore inventories to be marginal in the near-term.

China remains the world’s largest consumer of steel, utilizing 34% of all the steel produced globally each year.

Iron ore prices have declined 21% since December 2023 while steel prices have fallen 9% over the same period.