China's crude steel output up 2% y-o-y in H1CY23 as key provinces show uptrend

Crude steel output from China's steelmakers was up 2% over January-June, 2023 (H1CY23) to 538 million tonnes (mnt) compared to 526 mnt reported in the same six months in 2022, as per data maintained with SteelMint. All the provinces showed an uptrend in crude steel output except Shanxi.

Crude steel output growth was supported by the nation's higher steel exports in H1CY23. Exports jumped 32% to 43.88 mnt compared with 33.28 mnt in the corresponding period of 2022, as per Chinese Customs and SteelMint data. Subdued demand from downstream sectors mainly manufacturing and construction along with the depreciation of Chinese yuan (RMB) against US dollars ($) resulted in Chinese exports to the world market being more lucrative for mills and traders.

Moreover, domestic market sentiments improved on the back of hopes of more stimulus policies from the government to boost economic growth in the second half of the year. In June, blast furnace route steel producers enjoyed better margins amidst lower raw material costs and a recovery in finished steel prices.

Top three province-wise output

Hebei's output up 4% y-o-y

Hebei is known as the largest steel producing hub in China with a prominent share of blast-furnace units. Hebei's output saw a growth of 4% to 116 mnt in H1CY23 compared to 111.34 mnt in the same six months of 2022.

Jiangsu too sees 4% rise in output

The second largest steel-producing hub - Jiangsu, posted a 4% increase in crude steel output to 63 mnt in H1CY23 compared with 60.8 mnt in the corresponding period last year (CPLY). This province has a noticeable share of electric-arc furnace steel units.

Liaoning's output at 39 mnt

Liaoning is an industrial province with sizeable iron and coal mines in China. Anshan Iron and Steel (Ansteel) world's third-largest steel-producing unit is based here with an annual crude steelmaking capacity of 63 mnt.

Liaoning's crude steel output stood at around 39 mnt in H1CY23, up 3% against 37.34 mnt in the same period a year ago.

Going forward

In the second half of 2023, crude steel output is likely to remain flat as Chinese authorities have planned to keep output levels in line with 2022.

In order to achieve the same, China has gradually implemented various policies. However, the strength and pace of the control are not yet defined. As per reports, in August, 16 blast furnaces are scheduled to resume production in Tangshan, and 6 blast furnaces are scheduled to be on maintenance and repairs. Thus, output levels are likely to see de-growth in the near-term.