SteelOrbis Shanghai
During an information release meeting held a few days ago, the
China Iron and Steel Association (CISA) detailed the situation of the Chinese steel industry in the first three quarters this year.
Throughout the first three quarters, the overall Chinese national economy saw fast and steady growth as well as improved quality. With the brisk demand in both domestic and international markets, the national steel industry is operating smoothly.
1. Steel production increased sharply
From January to September, the
production of crude steel totaled 308.4378 million mt, up 18.45 percent year on year; that of
pig iron totaled 297.4577 million mt, up 20.83 percent; while
production of finished steel totaled 339.0349 million mt (including double-calculated steel), up 23.66 percent, maintaining its high rate of growth. The apparent
consumption of crude steel in domestic market amounted to 287.25 million mt, up 28.75 million mt or 10.5 percent year on year.
From January to September, the fixed assets investment made by the steel industry (including mines) amounted to RMB 180.3 billion ($23 billion), up 4.1 percent year on year, showing an obvious slowdown in growth. According to the figures released by
China's State Statistics Bureau, by the end of August, the newly-added
production capacity reached 6.473 million mt for iron, 3.622 million mt for steel, 12.839 million mt for hot rolled, and 2.722 million mt for cold rolled.
2. With the achievements in product structure adjustment, new progress has been made in energy saving
From January to September, finished steel output was recorded at 339.0349 million mt, up 23.66 percent year on year. Splitting this figure up into the various categories of steel product, we see that
production of cold rolled increased 48.58 percent to 18.1296 million mt, that of
galvanized steel increased 45.7 percent to 9.3796 million mt, that of
coated coil increased 24.4 percent to 1.6803 million mt,
production of electric steel increased 29.8 percent to 2.443 million mt, while that of seamless steel
pipe increased 30 percent to 10.7946 million mt. Obviously, the growth of these high-tech and high value-added products is much higher than for average steel products. As regards these,
production of
rebar totaled 61.30 million mt, up 18.3 percent year on year,
production of
wire rod rose 19.7% to 52.5759 million mt, while that of hot rolled narrow steel strip totaled 25.733 million mt, up 10.1 percent- all lower than the average growth of finished steel
production.
From January to September, the
production of flat rolled reached 137.6801 million mt, accounting for 40.61 percent of total steel
production; that of steel
pipe reached 26.2963 million mt, accounting for 7.76 percent. The total
production of flat rolled and steel
pipe amounted to 48.37 percent, up 0.85 percentage points compared with 47.52 percent for the same period last year.
The
production of cold rolled coils,
galvanized coils,
coated coils, and electric steel covered 9.43 percent of the total, up 1.36 percentage points year on year.
The comprehensive energy
consumption per ton of steel reached 645.67 kg/ton in the first 9 months this year, down 6.86 percent year on year. The comparable energy
consumption per ton of steel reached 625.85 kg/ton, down 6.37 percent. Meanwhile, power
consumption per ton of steel reached 445.9 kwh, up 0.81 percent. All these energy
consumption indexes indicated an overall downward tendency.
The fresh water
consumption per ton of steel reached 6.7 tons, down 1.86 tons or 21.77 percent year on year, representing new progress in water
consumption saving.
3. Steel imports came down while exports increased remarkably
Imports of finished steel from January to September amounted to 14.14 million mt, down 29.3 percent year on year; those of semi finished steel amounted to 320,000 mt, down 70.9 percent. Meanwhile, exports of finished steel amounted to 28.59 million mt, up 81 percent year on year; those of semi finished steel amounted to 6.13 million mt, up 2.4 percent.
Imports of finished and semi finished steel for the first three quarters totaled 15.3626 million mt in crude steel, and exports 36.5449 million mt, resulting in net exports of 21.1823 million mt crude steel. This not only meets the growing demand in the international market, but also plays an important role in relieving the imbalance between supply and demand in the domestic market.
From January to September, Chinese steel exports saw considerable increase. The major reasons are as follows: firstly, the global economic recovery creates brisk demand. According to the International Iron & Steel Institute, excluding Chinese steel
production, the global output for the first three quarters increased 5.1 percent year on year to 595 million mt of crude steel, which is not enough to meet the growing market demand. Therefore, the increased Chinese exports offset the insufficiency of the international market supply. Secondly, the distinct price difference between the international and domestic markets drives mills to do more exports. Thirdly, the Chinese steel industry has achieved remarkable progress in its technologies and competitiveness through many years of struggling on technical reform and process upgrading. Fourthly, affected by the market rumors about the new export rebate rate, mills want to export as much as possible in advance of the announcement of the new policy.
4. Steel prices turned up and down in domestic market
According to the statistics of CISA, the steel price index of the domestic market rose 21.95 percent from 94.18 at the beginning of the year to 114.85 in June, then gradually declined in July and August and moved up again to 106.33 by the end of September - down 7.42 percent compared with the end of June.
Broken down into the various products, compared with the beginning of the year, the price index of long products reached 92.8 by the end of September, up 4.82 percent; that of
rebar reached 87.81, up 1.21 percent; that of medium
plate reached 118.93, up 22.68 percent; that of hot rolled reached 107.24, up 31.92 percent; while that of cold rolled reached 107.67, up 17.21 percent.
5. Mills see decline in revenues
In the first three quarters of this year, 83 large- and medium-sized steel mills achieved RMB 983.153 billion ($ 125 billion) sales revenue, up 5.04 percent year on year. Meanwhile, their profits totaled RMB 63.825 billion ($ 8.1 billion), down 4.99 percent.
6. Iron ore imports declined in growth with rapid increase in domestic ore
From January to September,
iron ore imports totaled 247.13 million mt, up 24.2 percent year on year. The imports for Q1 reached 80.91 million mt, up 27.73 percent year on year; those for Q2 reached 80.56 million mt, up 18.45 percent year on year and down 9.29 percentage points compared with those of the previous quarter; finally, imports for Q3 reached 85.66 million mt, up 26.72 percent year on year and down 1.01 percentage points compared with those of Q1.
On the other hand, domestic ore saw a sharp increase in
production, which is one of the major reasons that caused the decline in the growth of
iron ore imports. The total
iron ore production in the first three quarters this year amounted to 480.821 million mt (low grade ore), up 126 million mt compared with that of the same period last year.