Chinese Crude Steel Output to Increase by 3% by the end of 2017

Chinese crude steel output to increase by 3% to 830 million tonnes by the end of 2017 but practically production has dropped against 2016.

Chinese crude steel production numbers may show an increment of about 3% by the end of 2017 to 830 MnT against 804 MnT in 2016. But this is contradicting to what Chinese officials have been claiming on production cuts.

According to industry participants, small induction furnaces which were operating without licence, their production numbers were not reported in the Chinese official data. This number could be somewhere between 50-60 MnT. As per official data China produced 804 MnT in 2016, but the actual production was over 850 MnT.

China is set to implement some of its strictest cuts to steel production in coming weeks in a bid to head off choking winter pollution and further consolidate a fractious industry.

The first wave of production cuts will halve the rate of steel production in the north-eastern city of Tangshan, the largest steel-producing city in China. This will ultimately affect 20 MnT of steel, the equivalent of about 7.5 per cent of national annual production. Three other key steel-producing cities — Shijiazhuang, Anyang, and Handan — to announce similar cuts.

According to participants in CISA conference, which concluded recently, stated that current utilization level of Chinese mills are around 80%, this is likely to fall to 50-55% during November’17- March’18.

Chinese Steel Exports to Fall

China’s steel exports have seen a noticeable fall over in the last year. In the first eight months of 2017, China exported 54.5 MnT of steel—28.8% lower than the same period in 2016. Exports are likely to be down in coming months owing to better domestic demand and possible fall in steel production.

Source: China Custom
Quantity in MnT