Rail projects will boost steel demand by 3%: Citi

Steel demand in China will climb 3 percent, as a result of $157 billion worth of approved new rail projects, according to Citigroup Inc.

The country's steel overcapacity of 718 million metric tons in 2009 has grown 23 percent to 884 million tons, the bank said in a report.

Steel consumption intensity to fixed-asset investment has also dropped 40 percent since 2009, it said.

"The recent stimulus measures announced are unlikely therefore to materially increase steel demand; we forecast an incremental uptick of 3 percent."