China’s finished steel demand is estimated to grow 5pc from prior year, as per the recent reports from the China Iron & Steel Association (CISA). This is lower than the 8pc projection made by the World Steel Association on October 15 in its short-range outlook.
The pandemic had caused Chinese steel demand to decline by 30pc in Q1 2020. Demand from the downstream industries has been rising since then as the country resumed economic activities. CISA added that China’s steel exports could drop by 15pc to 54.7mn mt from the prior year while steel imports are expected to a whopping 60pc growth to 19.7mn mt in 2020.
During the January-September period, China exported 40.4mn mt and imported 15.7mn mt of finished steel. CISA also indicated that steel exports will increase while imports will slow down in the last quarter of 2020.
Crude steel production
Qu Xiuli, CISA secretary general, projected a sharp recovery to cause crude steel output to exceed 1bn mt or to grow 3-5pc from the prior year despite the pandemic. However, in Q4 2020, winter production restrictions and the softening in demand could weigh down steel output.
Crude steel output registered growths of 1.2pc, 1.7pc and 10.3pc in Q1, Q2 and Q3, respectively. In Q4 2020, activities in construction and manufacturing have substantially slowed down.
SS production surges
In 2019, China produced 30mn mt of stainless steel (SS), in which the 200-series accounted for 35pc, up 15 percentage points in a decade.
China produced 14mn mt crude SS in the first half of 2020, down about 2.7pc from prior-year period, in which, the 200-series — including sub-quality — accounted for 4.4mn mt, down 6.4pc from the prior-year, according to the Stainless Steel Council of China Special Steel Enterprises Association.
The country will have to regulate its production in accordance with the new quality standardization released in September to produce more high-quality and corrosion resistance SS.
The country’s apparent SS consumption fell 2.3pc from the prior year to 11.7mn mt over January-June period. The supply of SS is significantly higher than the current demand. CISA has urged domestic enterprises to upgrade to advanced technology and shunt outdated facilities and processes.