In August, China’s crude steel output fell for the third consecutive month as Beijing continued to ask enterprises to limit production to reduce carbon emissions and power consumption.
Crude steel output fell for the third consecutive month
Data from the National Bureau of Statistics of China shows that, in August, the country’s crude steel production totaled 83.24 million tons – a decrease of 4.1% compared to July this year and a significant loss of steam. compared with 94.85 million tons in August last year.
This is the lowest level since March last year and is the third consecutive month that crude steel output of the country of billions of people has declined.
Also in August, average daily crude steel production hovered around 2.69 million tons, down from 2.8 million tons in July, Reuters further noted.
However, in the first eight months of the year, China – the world’s largest steel producer, produced more than 733 million tons of crude steel, up about 5.3% over the same period last year.
Beijing continues to squeeze output
In the coming weeks, Beijing will continue to limit steelmaking activities to keep this year’s output levels comparable to 2020 as well as to lower domestic energy consumption, S&P Global Platts quoted sources familiar with as saying.
According to S&P, eastern and southern China are expected to be targeted areas in the near future, as the provinces of Jiangsu, Zhejiang, Yunnan, Guangxi and Guangdong have yet to rein in their spending levels. energy consumption as stated.
So far, Hebei, the largest steel-producing province in China, is the only province on track to meet this year’s output target.
In order to achieve the task assigned by Beijing, Hebei has been trying to control the output of the steel industry capital Tangshan since March. Moreover, thanks to the decline in steelmaking activity, the province is also on the verge of completion. power consumption target.
(Artwork: Reuters).
Steel mills in Jiangsu, Shandong and Liaoning, the second, third and fourth largest steel-producing provinces in China, respectively, have also gradually implemented output curbs since the beginning of the month. 9.
Therefore, it is estimated that from the beginning of the year to the end of September, crude steel production in Jiangsu and Tangshan may decrease by more than 1 million tons. During the same period, Liaoning can reduce production by about 600,000 tons.
Yunnan province is in danger of exceeding its energy consumption target for 2021, so the local government has asked steel mills to lower crude steel production by 30% in September. If so, Van’s crude steel output Nam can reduce about 500,000 tons during the first 9 months of the year.
Large mills in Guangxi province have also planned to squeeze output from the end of September, while electric arc furnace steel output in Guangdong and Zhejiang provinces may decrease in September to comply government energy consumption requirements.
Steel prices increase limited in the last months of the year
Some S&P sources predict, China’s total crude steel output will trend down for the rest of 2021. However, even if the decline widens in the fourth quarter, “steel prices” are still unlikely. increase.
As explained by S&P, part of the reason is due to the low iron ore price helping to lower production costs, and the other part is because the demand for steel in the real estate sector is at risk of slowing down in the second half of the year. The Chinese government is tightening credit for the real estate sector to limit the risk of debt ballooning.
By mid-September, the recovery of the public construction sector was still quite weak compared to the same period last year, some steel traders said. China increased the issuance of local bonds in the fourth quarter, but it will not be until early 2022 that these bonds will start to stimulate the wave of infrastructure investment.
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