2023 in review: Ten highlights of China's ferrous industry

Here are the 10 key events that shaped China's ferrous industry in 2023.

1. The ban of new steel production capacity

China's State Council published an action plan in early December to improve the country's air quality, as part of its efforts to pursue a high-quality economic development.

The plan states that China will resolutely curb the blind launch of projects with high energy consumption and high emissions, and it stresses the ban of new steel production capacity across the country. In addition, the removal of outdated capacity in key industries including steel, coking and electrolytic aluminum should be accelerated.

China will continue to promote the development of electric-arc-furnace (EAF) steelmaking to reduce carbon emissions. EAF-route steel production is targeted to account for 15% of the country's total steel output by 2025, according to the plan.

The country will also promote high-quality transformation of ultra-low emissions in key industries such as steel, cement, coking and coal-fired boilers. By 2025, more than 80% of the steel capacity in China should meet the ultra-low emission targets, and steel capacity in all key areas should achieve ultra-low emissions, the plan notes.

2. The release of steady growth plan for steel industry

In late August, China's Ministry of Industry and Information Technology, together with the National Development and Reform Commission and five other government organizations, released a working plan focusing on the steady development of the country's iron and steel industry over 2023-2024.

The plans notes that the value-added of China's iron and steel industry aims to grow by 3.5% on year in 2023 and the industry will strive to maintain a dynamic balance between steel supply and demand this year. Moreover, the fixed asset investment in the industry is set to maintain steady growth this year.

And the structure of the industry will be optimized further towards high-end, intelligent and green development in 2024, and its industrial added value will increase by above 4% next year, as per the plan.

3. The advancement of 'green' steel

By end-October, a total of 99 Chinese steel enterprises have completed ultra-low emission renovation and environment impact assessment, covering a total crude steel capacity of 470 million tonnes. China's steel industry will continue to advance ultra-low emission renovation, and 80% of the country's total steelmaking capacity is expected to be transformed by 2025, according to Mysteel's tracking.

4. The progress of Cornerstone Plan

Since the launch of Cornerstone Plan in March 2022, the scheme is already showing results -- construction of more than 10 iron ore mining projects across China has kicked off, with their total production capacity of iron ore concentrates reaching some 50 million tonnes/year, according to a senior official of the China Iron & Steel Association (CISA) during a conference held in late November.

The plan aims to raise China's domestic iron ore supply, steel scrap consumption and equity output of iron ore in overseas mines. Significantly, domestic iron ore output is expected to reach 370 million t/y by 2025, which translates to a 100 million t/y increase from the 2020 level. The efforts are being made to meet China's goal to raise its self-sufficiency rate of steelmaking raw materials during the 14th Five-Year Plan period (2021-2025).

5. The strengthened supervision on China's iron ore market

For November alone, China's state planner, the National Development and Reform Commission (NDRC), had made four moves to intensify its supervision on the overheated iron ore market. Both spot and futures prices of iron ore in China hovered at high levels throughout most of this year, as reported.

In its latest move on 27 November, the NDRC launched a probe into the price indices of commodities including iron ore, steel, lithium and palm oil that were compiled by several institutions, aiming at the promotion of a reasonable formation of prices and maintaining healthy markets. And the state planner also held meetings with trading firms and futures companies and guarded against hoarding iron ore at ports earlier.

6. The release of guideline for intelligent manufacturing in steel sector

China's Ministry of Industry and Information Technology (MIIT) issued a guideline for the construction of intelligent manufacturing standard system in the steel industry in late October. The major goal is to establish a comprehensive standard system to guide the intelligent manufacturing of China's steel industry and to formulate at least 45 industrial standards for the sector by 2025.

7. The surge in finished steel exports

China's finished steel exports over January-November surged by 35.6% on year to reach 82.66 million tonnes, according to the latest data released by the country's General Administration of Customs (GACC). The steel export volume during the past 11 months refreshed a new high since 2017, largely due to the price advantage that Chinese steel products had maintained in international steel markets.

8. The higher concentration of steel industry

During 2023, more mergers and acquisitions (M&As) were seen among leading Chinese steel enterprises, enabling the country's steel industry to steadily progress towards higher concentration.

The most recent M&As involved the stake deal of Nanjing Iron & Steel United Co. to Nanjing Iron & Steel Group, Baoshan Iron & Steel Co's buying of stake in SD Steel Rizhao Co., Ltd. from Shandong Iron & Steel Group, and Shagang Group's purchase of stake in Fushun Special Steel Co., Ltd.

9. The transformation and upgrading of regional steel sector

Several provinces in China including Zhejiang, Shanxi, Henan and Hubei had rolled out action plans to accelerate innovation and high-quality development of local steel industry this year, according to Mysteel's tracking.

Merger and acquisition activities among steel companies, the upgrading and elimination of outdated or inefficient steelmaking capacity, and development of electric-arc-furnace steelmaking in the province are all encouraged, as per the plans.

10. The establishment of coal capacity reserve system

China is set to establish coal capacity reserve system by 2027 to ensure coal supply to domestic end-users, according to a draft plan issued by the National Development and Reform Commission (NDRC) in early December.

Specifically, by 2027, China will establish a certain scale of government-deployable coal capacity reserves by approving a batch of coal mine projects, and the country will advance further to achieve 300 million tonnes of such capacity reserves by 2030 to be flexibly arranged by the government in emergent situations like unreasonable spot price surges or coal supply crunch, the plan noted.

Note: This article has been written in accordance with an article exchange agreement between Mysteel Global and SteelMint.