Reuters reports that steel association said that China's steel demand will increase slightly in 2021, supported by stable macroeconomic policies, even as the government has urged companies to produce less steel this year.

Economic policies that China adopted to cope with the COVID-19 pandemic will shore up China's steel demand, Qu Xiuli, vice chairwoman of the China Iron and Steel Association (CISA) said at a news conference.

Citing a desire to reduce carbon emissions, the industry ministry had asked China's mammoth steel sector to produce less crude steel in 2021 than the record 1.05 billion tonnes it logged last year.

But CISA's vice chairman, Luo Tiejun, told the briefing that higher demand this year could be met by other means.

"We can strengthen imports of primary steel products, especially billets... so that rising demand can be met without increasing output," said Luo.

Luo also said the government is planning to roll out favourable policies to encourage such imports.