Hebei province’s crude steel production declined 10% compared to the increase shown by the nine regions y-o-y. Hebei increased the intensity of production cuts in Tangshan ahead of the Beijing Winter Olympics.
Crude steel production in Hebei (China’s largest production hub) in CY’21 was recorded at 224.96 million tonnes (mnt), down 9.93% y-o-y.
China’s crude steel production in CY’21 was 1,032.79 mn t, down 3% y-o-y. In China, four regions showed a decline in output of more than 5% on an annual basis.
The rate of production cuts in China increased since H2 of last year but in Hebei, Tangshan, the largest steel producing region in the province, started to cut production in March and Handan, a major steel producing region, had begun with production cuts in May’21.
Besides that, crude steel output in CY’21 in Henan province, close to Hebei, decreased by 6.06% compared to the previous year. Meanwhile, in CY’21, crude steel production in Tianjin inched down 16% y-o-y. Guangdong province also showed a 6.03% cut compared to the year-ago period.
In the case of Jiangsu province, the second largest production region after Hebei, crude steel production in CY’21 was 119.25 mnt.
Meanwhile, Shaanxi, Guangxi Zhuang, Hubei, Jiangxi, Fujian, Yunaan, Shanghai City, Jilin, Ningxia Hui and other regions registered an increase in crude steel output in CY’21 in comparison to CY’20. Fujian and Guangxi Zhuang are also hubs of special treatment steel (STS) producers and crude steel production in these regions was driven by STS rather than carbon steel.
ovince, Shanghai City, Jilin Province, Ningxia Hui and other nice regions registered an increase in crude steel output in CY’21 in comparison to CY’20. Fujian Province and Guangxi Zhuang are also major special treatment steel (STS) producers and crude steel production in these regions was driven by STS steel rather than carbon steel.
Will production cuts continue?
As per the government’s norms, the annual production cut target was not to exceed CY’20 levels in CY’21. Chinese steelmakers tried to increase production as long as they did not exceed the production target in CY’21.
With the Beijing Winter Olympics approaching, some steel manufacturers have stopped operating in Shadong province and most of them have cut production levels by 30-70% there.
There has been a 30% production cut in Shanxi province, while production was entirely halted in Henan, Wuan City and Hebei. Also, it is heard that Gorossa announced 50% production cut.
However, in the case of Henan, besides, Anyang City, owing to the spread of Covid-19, most of the other regions are operating at normal production levels.
Outlook
However, Tangshan City, Hebei, will implement a production system ahead of the Beijing Winter Olympics. From 30 Jan-20 Feb’22, the daily molten iron production should be raised from 57,000 t to a maximum of 142,000 t, and from 20-28 Feb’22 to 93,000 t, and from 1-13 Mar’22, to 137,000 t of daily molten iron output is to be maintained.
MySteel predicts that the utilisation rate of the blast furnace in Dangsan City would drop from 78% to 55-63% during Feb-Mar’22, and there would be an additional production cut of 60,000 t per day.
It is also expected that Shandong and Henan will also announce production cuts in the near future.
Note: This insight has been published in accordance with an article exchange agreement between SteelMint and SteelDaily.
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