Posted on 24 Dec 2021
China's crude steel output this year will fall below the 2020 total by some 20 million tonnes, according to a recent post of the Ministry of Industry and Information Technology (MIIT) which oversees the steel industry. As a result, the country's steelmakers will have successfully complied with the central government's directive issued in January to ensure that crude steel output this year falls from last year, Mysteel Global notes.
The MIIT's post does not surprise because by November, domestic crude steel output in the first eleven months was already 2.6% lower on year at 946.4 million tonnes, as Mysteel Global reported.
MIIT issued the statement at a conference held to summarize this year's work and plan for next year. For 2022, MIIT said it will boost industrial development to support the country's economic growth.
Among other measures being eyed in relation to industrial development next year, the ministry will also continue to promote digital transformation of the manufacturing industry and low-carbon transformation of industrial plants, according to the post.
The ministry said next year it will "firmly prevent the blind development of 'two high' industries", referring to industries generating high levels of emissions and consuming high levels of energy - including steel.
Though MIIT's post contained nothing specific about whether the ministry will continue to curtail crude steel output in 2022, Chinese steel market insiders generally take it for granted that similar measures will remain in place next year.
"For now, China's steel industry concentration has yet (to reach a level) to influence the market, so to control both capacity and output will remain an important and effective means to maintain the balance of market supply and demand," an industry analyst from the China Steel Development Research Institute stated in a post on December 21.
This year's output curtailment and past years' efforts to phase out outdated steel capacity mean that the domestic steel market did not witness a repeat of the 2015 "nightmare", he pointed out, the year when steel prices fell to historical lows and the whole industry suffered serious losses. This year the industry was in general maintained stable, even though steel consumption in September and October declined by over 20% on year - falls that were much steeper than in 2015, Mysteel Global notes.
An official from a steel mill in East China's Shandong also believed that domestic crude steel production will continue to be restricted next year. "Other than by issuing direct orders to cut output, there are just too many ways for the authorities to restrict production," he said.
"Environmental protection requirements, safety controls, energy consumption limits and legal capacity verification - these all are shackling our production. It is too hard for mills to increase output, no matter how high the profits might be," he said.
Source:Mysteel Global
