Residential construction has been a key source of demand for steel in the Chinese economy. It currently accounts for around 15 per cent of total steel use. By our estimates, the quantity of steel used in residential construction has roughly doubled over the past eight years.
This has been driven by urbanisation and rising incomes, which in turn drive the demand for newer, larger and higher-quality buildings. While we would not expect growth to continue at such a rapid rate, steel use from this sector is not expected to peak for some years. Of course, we should not overlook other sources of demand for steel.