Posted on 22 Nov 2021
Each of China's top three steel-producing provinces recorded on-year falls in their crude steel output during this year's January-October period as their efforts to comply with Beijing's directive regarding production this year gathered pace entering Q4, the latest data from China's National Bureau of Statistics show.
During the first ten months, crude steel output in Jiangsu and Shandong, the country's second- and third-largest steel producing provinces respectively, became negative on-year for the first time, dropping by 0.5% and 1.7% on year. They joined North China's Hebei, the country's dominant steel producing province, where output has been negative on-year since June.
The top three steelmaking provinces account for over 40% of China's total steel production and their efforts in curtailing steel production were key to the country's first on-year decline in steel output of 0.7% over January-October.
|
Ranking |
Province |
Output over Jan-Oct (mln t) |
YoY (%) |
|
1 |
Hebei |
189.72 |
-10 |
|
2 |
Jiangsu |
100.3 |
-0.5 |
|
3 |
Shandong |
65.5 |
-1.7 |
|
4 |
Liaoning |
63.87 |
0.9 |
|
5 |
Shanxi |
57.27 |
5.4 |
|
6 |
Hubei |
31.2 |
9.4 |
|
7 |
Guangxi |
31.01 |
10.5 |
|
8 |
Anhui |
30.81 |
0.4 |
|
9 |
Henan |
29.24 |
-0.1 |
|
10 |
Guangdong |
27.48 |
0.3 |
|
... |
... |
... |
··· |
|
Total |
Nationwide |
877.05 |
-0.7 |
Source: NBS
The Hebei government's efforts to rein-in the production of local mills that commenced back on March 20 continued last month. Beginning October 21, local mills further restrained production, mainly their sintering operations, as part of emergency measures activated by the local government to combat poor air quality. The measures lasted until November 7, as Mysteel Global reported.
Hebei's crude steel output last month declined by 27.7% on year - a more severe reduction than the 22.8% drop in September, the NBS numbers show.
Last month, steel producers in Jiangsu gradually recovered their operations after power rationing (introduced from mid-September) was eased. Nevertheless, their output remained constrained because of the overall pressure to reduce annual crude steel output this year. In October alone, the on-year decline eased to 17.4% from 27.2% in September.
In Shandong, more local steel producers joined in efforts to limit steel output in October, according to local market sources, and hence, the on-year fall in the province's steel output deepened to 40% last month from 30.1% in September.
|
Ranking |
Province |
October output (mln t) |
YoY (%) |
|
1 |
Hebei |
15.16 |
-27.7 |
|
2 |
Jiangsu |
9.03 |
-17.4 |
|
3 |
Shanxi |
5.56 |
-4.4 |
|
4 |
Liaoning |
5.21 |
-19.6 |
|
5 |
Shandong |
4.03 |
-40 |
|
6 |
Hubei |
2.85 |
-14.3 |
|
7 |
Guangxi |
2.82 |
-14.6 |
|
8 |
Anhui |
2.48 |
-24.7 |
|
9 |
Henan |
2.36 |
-27 |
|
10 |
Jiangxi |
2.29 |
0.33 |
|
... |
... |
... |
··· |
|
Total |
Nationwide |
71.58 |
-23.3 |
Source:NBS
So far in November, weakening winter demand, plus the faster declines in steel prices than raw materials prices this month compared with October, have prompted mills to act. More producers have idled production facilities to carry out maintenance, as Mysteel Global reported.
Meanwhile, mills in North China began observing winter restrictions - mainly on sintering, coke-making and hot metal production - to ease pollution. The stoppages commenced randomly depending on the region, some from November 1, others from November 15, but the result is that regional production remains restricted.
But market sources note that the impact on output might not be so pronounced as the steelmakers have had already had their operations under serious curtailment.
Source:Mysteel Global
