14 March 2023 – Consumption in China is steadily increasing. In February, the granting of short-term consumer loans in China rose by more than 250%. This is likely to have already reached the local economy and to continue to increase. EU committee presents figures for raw material requirements for the energy turnaround – almost half a billion tonnes of special and stainless steels are needed to build 700,000 onshore wind turbines alone.
- China: Consumption clearly on the upswing
- EU energy transition: Massive growth in demand for raw materials
China: Consumption clearly on the upswing
As Deutsche Bank reports today, the growth of consumer loans in China has strengthened significantly. Compared to the previous month, the granting of short-term loans rose by more than 250% in February to the equivalent of 16.5 billion euros. This remarkable momentum is likely to have already ensured significant sales growth in the retail sector there in February. It is believed that tomorrow’s cumulative industry sales for January and February could exceed the 3.6% year-on-year growth expected by analysts.
Consumer demand shoots up 18%
Following the typical reopening pattern, consumers in China are likely to use parts of their savings – which rose another 18 per cent year-on-year in February – to fulfil their consumption desires pent up during the three pandemic years as the economic recovery progresses. China’s service providers and producers of consumer durables, as well as foreign luxury goods manufacturers, should benefit. Also a good outlook for steel demand in China.
EU energy transition: Massive growth in demand for raw materials
We have already discussed several times that enormous quantities of raw materials from the areas of copper, aluminium, steel, stainless steel, cement, but also battery raw materials such as lithium, nickel and cobalt are needed for the global energy transition. At the end of February 2023, the European Union published an opinion of the European Economic and Social Committee on the subject of “Emergency Preparedness” in its Official Journal, which contains interesting figures on the expected demand for raw materials.
Copper, aluminium, steel, stainless steel, nickel
According to EU estimates, the raw material demand for the necessary wind turbines alone would increase by a factor of 14 for copper (from 25 million tons to 350 million tons pa) and by a factor of 7.2 for aluminium. For special steels, such as stainless steel, the demand factor is expected to increase by a factor of 3.9 of current global production.
EU needs stainless steel for 700,000 onshore wind turbines
According to the Committee’s data, Europe alone needs the construction of at least 700,000 onshore wind turbines in the 5 MW range. The construction of the 200-metre-high wind turbines alone would require 600 tonnes of special steels and stainless steels per unit. 420,000,000 tonnes – an additional demand of at least 2.1 million tonnes per year – in the EU alone. The demand for high quality stainless steel (such as 316L, S31603) for offshore installations should be added to this.
Hydrogen, ammonia, CO2 – storage tanks are made of stainless steel
In addition, there are millions of solar modules (aluminium, copper) and a massive and urgently needed expansion of storage facilities for hydrogen, ammonia and CO2 and the necessary infrastructure for transport via pipelines to the respective storage facilities or to the consumer. For hydrogen, ammonia and CO2, this enormous storage and distribution system must largely consist of austenitic stainless steel grades as well as duplex and super-duplex grades.
Nickel demand to rise to 17 million tonnes per year
The increasing demand for stainless steel will thus also lead to an increasing demand for nickel. However, nickel is also used for battery storage in electric vehicles and increasingly for the storage of alternative energies, such as solar power produced by end consumers, but also in large-scale industrial storage facilities. The Nickel Institute had already stated in 2021 that the raw material nickel must be seen as a decisive factor in the energy transition. Indonesia, for example, assumes that at least 17 million tonnes of nickel will be needed worldwide per year from 2025 onwards, which almost coincides with our own calculations.
Committee calls for rapid implementation
Understandably, the EU Committee has called for a speedy and unbureaucratic implementation of the energy transition. The European Union cannot meet the demand on its own and is urgently dependent on imports.
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