One Chinese Leader's Solution to Steel Glut? Require Builders to Use More of It
12/16/2015 - Chinese government leaders might be considering a policy that would increase – perhaps triple — the amount of steel used in housing construction as a way to soak up excess steel supply, according to BloombergBusiness.
Citing an unnamed source, the news service reported that Chongqing mayor Huang Qifan proposed a policy requiring that builders use 150 kilograms of steel per square meter, arguing that it would reduce overcapacity and improve housing quality.
Builders use around 50 kilograms of steel per square meter now. Bloomberg said it isn’t clear if the policy is being considered, but discussion at a recent meeting to finalize the country’s five-year plan suggested a degree of broader support.
Paul Butterworth, a research manager for the commodities consultancy CRU Group, said such a policy probably wouldn’t significantly increase domestic steel demand.
“Simply saying a building must be made out of steel rather than concrete would have little impact on overall usage, although the types of steel would change," Butterworth told Bloomberg. "There is no design need for a higher level of steel and it would add little to the performance of the building, but would add significantly to cost.”
Builders use around 50 kilograms of steel per square meter now. Bloomberg said it isn’t clear if the policy is being considered, but discussion at a recent meeting to finalize the country’s five-year plan suggested a degree of broader support.
Paul Butterworth, a research manager for the commodities consultancy CRU Group, said such a policy probably wouldn’t significantly increase domestic steel demand.
“Simply saying a building must be made out of steel rather than concrete would have little impact on overall usage, although the types of steel would change," Butterworth told Bloomberg. "There is no design need for a higher level of steel and it would add little to the performance of the building, but would add significantly to cost.”
