China to produce less steel in 2022

China has stopped increasing steel production and Beijing's policy is to produce 100-150 million tonnes (mnt) less steel in 2022 than in 2021. Steel demand is still strong in China and exports are not of real interest to mills there, says the Short Range Outlook of the International Rebar Producers and Exporters Association (IREPAS). Chinese steel exports are firmly below 6 mnt per month.

Furthermore, the Chinese government seems to be proposing more infrastructure investments. If China does not produce as much as it did in 2021 and if exports do not increase, then all other suppliers will have the chance to export to Southeast Asian and Far Eastern markets as well.

Another major positive is that, if less steel is produced, it will create a mini boom in import demand from mainland China.

Also, China's stimulus measures in December brought production back in line after the Evergrande debacle, which boosted sentiment.