CISA expects steel demand to rise in 2021 fueled by government policies to mitigate the impact of the COVID-19 pandemic on the economy. In a press conference on Wednesday, CISA’s top brass reiterated China’s commitment to reduce carbon emission and thereby cut crude production in 2021, but emphasized on alternative means to support steel consumption.
China is mulling policies to promote billet imports in a bid to secure raw material while containing crude output, said CISA’s vice chairman, Luo Tiejun, according to local media. The association expects the trend of increased imports and lower exports to continue in 2021.
In 2020, China’s crude steel production exceeded 1bn mt mark to 1.05bn, up 5.2pc from a year ago. Early recovery from the COVID-19 pandemic fueled by government stimulus lead China to a fourth successive year of over 1bn mt steel output. Steel exports fell by 16.5pc to 53.671mn mt in 2020 amid a slump in global steel demand and robust domestic steel demand. While steel imports rose by 64.4pc to 20.233mn mt from 2019 as ramped up domestic steel production consumed higher volumes of imported semis.
Given the trade dispute challenges around iron ore imports from Australia and supply disruptions in Brazil, encouraging semi-finished imports, especially billets, could bode well for Chinese mills, as authorities are adopting a stricter stance on clearing ferrous scrap imports. Higher standards on ferrous scrap imports, allowed since Jan 1, has led to hesitation among suppliers eager to exports scrap to China. Imports by Chinese mills have slowed after a few initial deals in early January.