China: CISA sees 35 mn t fall in 2021 steel output
China’s crude steel output is expected to drop by 35 million tonnes or 3.3% on year to 1.03 billion tonnes for 2021, Shi Hongwei, a deputy secretary general of ...
China's crude steel output is expected to drop by 35 million tonnes or 3.3% on year to 1.03 billion tonnes for 2021, Shi Hongwei, a deputy secretary general of the China Iron and Steel Association (CISA) predicted Friday at an online conference hosted by Mysteel highlighting industry developments in the coming year.
The decline will mark the first on-year fall in China's crude steel output since 2016, Mysteel Global noted. CISA's estimate of the reduction is also more severe than that of the Ministry of Industry and Information Technology (MIIT) which has predicted that raw steel output would fall by some 20 million tonnes this year from last year, as reported.
"The major reason for the drop was the production curbs imposed by the central government among steel mills in the second half of this year, which helped to maintain the dynamic balance between supply and demand," Shi pointed out.
For this year, China's apparent crude steel consumption is estimated at 990 million tonnes, down 58 million tonnes or 5.5% from the previous year, according to Shi.
China's total crude steel output started to head south from October, with the total volume posting a sharper on-year fall of 2.6% to 946.4 million tonnes for the first eleven months of this year, as against the 0.7% on-year dip for the first ten months, according to the data from the country's National Bureau of Statistics.
Despite the decrease in output, the gross profits of CISA's member steel mills saw substantial on-year growth to total Yuan 350 billion ($55 billion) over January-November, much higher than the Yuan 207 billion approximated for the whole of 2020, he explained. This was mainly thanks to the expanded industrial scale and mills' better profitability, Shi added.
For the first eleven months of 2021, the profit margin on sales among CISA's member mills came in at 5.54%, up 1.13 percentage points from that for 2020 and marking the third highest ever recorded, following the 7.29% in 2006 and 6.92% in 2018, according to him.
Besides, the industrial concentration of China's steel industry increased further this year thanks to mergers and acquisitions among large-sized steelmakers such as the Ansteel-Bengang marriage.
Over January-November, China's top ten steelmakers produced 381 million tonnes of crude steel, accounting for 40.3% of the country's total and higher than their share of 39.2% for 2020. The top 20 steel mills' output contributed to 53.7% with the tonnage of 508 million tonnes, Shi noted.
Written by Nancy Zheng, zhengmm@mysteel.com
This article has been published under an article exchange agreement between Mysteel Global and SteelMint.