Hebei Stays China's Top Steel Producing Province in CY19

North China's Hebei province produced 241.6 MnT of crude steel in 2019, contributing 24.2% to the country's total and maintaining its position as the top steel-producing base among 31 Chinese provinces, municipalities and autonomous regions, according to recent statistics from China's National Bureau of Statistics (NBS).

After Hebei, East China's Jiangsu held its rank as second largest with its crude steel output totalling 120.2 MnT and taking up 12.1% of the country's overall output, according to NBS.

Hebei and Jiangsu were followed by Northeast China's Liaoning province, East China's Shandong and North China's Shanxi. However, among the major steelmaking provinces, Hebei's proportion in the total declined the most, dipping by 0.88 percentage point on year in 2019, Mysteel Global noted.

The decline was not a surprise to market watchers as Hebei continues on a steady path to cut steel capacity, even though China already fulfilled its goal of cutting 100-150 MnT/year steel capacity over 2016-2020 by 2018, two years ahead of schedule.

Though Hebei removed 12.3 MnT/y and 14.02 MnT/y of iron and steel capacity in 2018 and 2019 respectively, it has vowed to cut another 14 MnT/y within this year to fulfil its goal of eliminating a total of 40 MnT/y and restraining total capacity to below 200 MnT/y, as Mysteel Global reported.

Jiangsu, in contrast, saw its proportion climb the most, gaining 0.68 percentage point on year, with its crude steel output growing faster than both Hebei and the national total, Wu Yong, senior analyst with China Metallurgical News, observed.

In 2019, Jiangsu's crude steel production increased by 15.9 MnT or 15.3% on year, much faster than 1.3% in Hebei and the 8% growth for China as a whole, he noted.

"Environmental production restrictions on Jiangsu (steelmakers) were much less than those imposed on Hebei (mills)," Wu said. "Jiangsu is also closer to steel consuming markets. It improved its capacity utilization and added more steel scrap last year," he told Mysteel Global on Wednesday.

Last year, steelmakers in Hebei had observed production curbs throughout almost the entire year and, more often than not, the curbs were intensified whenever air quality in parts of the province deteriorated markedly, as Mysteel Global reported.

The increased capacity utilization and steel scrap input among Jiangsu steelmakers were observed by other market sources, with one Shanghai-based source close to Shagang Group, China's largest private steel producer in Jiangsu, pointing out that Shagang's scrap consumption increased from nearly 7 MnT in 2018 to around 7.2 MnT in 2019.

Table - China's top ten steel making provinces in 2019 Unit: '000 t

Source: NBS statistics

This article has been published under an article exchange agreement between Mysteel Global and SteelMint.