China’s shipbuilding remained robust in 2024, and is likely to maintain strong growth momentum in 2025, which would benefit the steel plate market. However, the plate market is set to face continued pressure this year due to growing capacity, industry sources told S&P Global Commodity Insights.
China’s shipbuilding completions reached 48.18 million dead weight tonnage in 2024, up 13.8% on the year, accelerating from 11.8% year-on-year growth in 2023, the latest data from the country’s Ministry of Industry and Information Technology showed Jan. 16.
Meanwhile, new shipbuilding orders received in 2024 increased 58.8% on the year to 113.05 million dwt, taking the shipbuilding backlog held by Chinese shipbuilders to 208.72 million dwt by the end of December, up 49.7% on the year.
Some steel market sources highlighted that shipbuilding orders remained strong, and as a result, steel demand in the shipbuilding sector will maintain strong growth at least through 2025-27.
The shipbuilding industry’s steel consumption increased by 6.7% on the year in 2024 to 16 million mt, and is likely to increase by 12.5% on the year to 18 million mt in 2025, according to Commodity Insights data.
About 85% of the total steel consumption in the shipbuilding sector is flat steel, and plate accounts for the majority of the flat steel, according to China’s Association of the National Shipbuilding Industry and market sources.
However, the Chinese plate market has still been facing pressure, mainly as plate production capacity growth has largely offset the momentum of demand growth, some market sources said.
“Demand for plate has been decent, as the growth in shipbuilding, as well as wind power and machineries, has offset a contraction in property-related sectors, but plate capacity has also been rising quickly, which, coupled with the downturn in the whole steel industry, keeps the plate prices basically in a downward trend through 2024,” said a trade source.
Platts, part of S&P Global Commodity Insights, assessed domestic plate price at Yuan 3,470/mt ($473/mt) on Jan. 15, down from Yuan 4,050/mt a year before.
Plate capacity expansion
China plate production capacity expanded quicker in 2024 than in 2023 and is likely to increase further in 2025.
The Chinese steelmakers commissioned five plate mills in 2024 with a total of 11.2 million mt/year capacity, and planned to bring another eight plate mills of 15.5 million mt/year capacity mainly in 2025, according to Commodity Insights calculations.
According to China Metallurgical Industry Planning and Research Institute (MPI), China’s plate capacity reached around 97 million mt/year at the end of 2022. That means by the end of 2025, the total plate capacity is likely to increase by 31% from the end of 2022 to around 127 million mt/year.
Some market sources expected the plate market to continue experiencing supply pressure in 2025, especially as a potential escalation of trade conflicts in the global market may weaken the exports of Chinese machines.
Source: Platts
