China is trying to find a path between stimulus and reform, leaving markets volatile as they try to guess every turn in the road. China’s steel output will still increase in 2021, but demand is set to slow. As China sets its policies for the year and for the coming five years, the industry will need to adjust to a new mode of economic development.

For the rest of the world, that means China will not be supporting markets the way it did in 2020. China’s imports will fall, and exports will increase.

As China enters the new year, its global influence is again switching. While in 2020 it was Chinese stimulus that supported global markets, which were ravaged by Covid-19, in 2021 global markets are expected to recover (eventually) while China’s market slows down. Within China, this change is being driven by its longer-term economic goals. Achieving targets for household income, sustainable finance and lower greenhouse gas emissions will require a restructuring of the economy which will impact steel demand negatively. The question however is how fast the reform will come.