Posted on 24 Feb 2023
During 2023, China's apparent consumption of crude steel is expected to stay largely flat on year at 950 million tonnes, Luo Tiejun, vice president of the China Iron and Steel Association (CISA), told during the National Steel Scrap Conference in Chengdu in Southwest China's Sichuan on February 23.
"Of course, this forecast assumes that the domestic real estate sector will recover this year. Otherwise, steel consumption may further decline slightly," Luo emphasized to the over 1,000 delegates attending the annual event jointly organized by China's Association of Metalscrap Utilization and Mysteel.
In retrospect, China's steel industry faced considerable challenges in terms of supply-demand balance and mills' profitability during 2022, Luo noted. Crude steel output declined by 2.1% on year to 1.013 billion tonnes last year, while apparent steel consumption dropped 3.4% on year to 960 million tonnes.
On the other hand, domestic steelmakers had to endure high production costs, Luo said. "Persistent high prices of key steelmaking raw materials, particularly coking coal, coupled with feeble steel demand and softer steel prices, led to the substantial decline in mills' profitability throughout last year."
For example, the profitability in steel sales among CISA's member mills plunged 72% on year to total below Yuan 100 billion ($14.5 billion) in 2022, Luo noted, citing the association data, while the debt-asset ratio among members rose for the first time in six years, climbing by 0.3 percentage point on year to 61.7% by the end of last year.
"But on a brighter note, the asset structure of our member mills remained healthy, even though their profitability slumped," Luo said.
To maintain the high-quality development of China's steel industry, this year CISA will continue to strengthen monitoring and supervision of the steel industry's overall operations while pushing forward with low-carbon and "smart" steelmaking initiatives.
The association will also urge member mills to further cut surplus steel capacity, adhere to old-for-new steel capacity "swap" guidelines when planning new facilities, and strive to meet ultra-low emission standards, Luo added.
Another top priority for CISA this year is to advance the Cornerstone Plan to raise China's self-sufficiency ratio of steelmaking raw materials. Launched in March 2022, the plan aims to boost domestic iron ore output to 370 million tonnes/year by 2025, which translates to a massive 100 million t/y increase from the 2020 level, as Mysteel Global reported.
Source:Mysteel Global
