Go to List

Which are the top 7 crude steel producing provinces in China?

5 of China’s top 7 steel-producing provinces report y-o-y drop in 2022 Largest producer Hebei posts 6% drop Decarb efforts, Covid, realty crash keep demand muted Cu...

Finish Flat
By
1637 Reads
10 Feb 2023, 09:11 IST
Which are the top 7 crude steel producing provinces in China?

  • 5 of China's top 7 steel-producing provinces report y-o-y drop in 2022

  • Largest producer Hebei posts 6% drop

  • Decarb efforts, Covid, realty crash keep demand muted

  • Current calendar may see further output decline

Morning Brief: Crude steel production from China's top seven producing provinces edged lower by 3% y-o-y in calendar 2022 to 618 million tonnes (mnt) compared to 636 mnt in 2021, as per data maintained with SteelMint. Five of the top seven reported a drop.

China's total crude steel production in 2022 declined by 22 mnt (2%) to 1,013 million mnt from 1,035 mnt in 2021.

Hebei sees 6% drop in output
Amongst the seven provinces, Hebei was the largest producer with 212 mnt. However, production dropped 6% last year from 225 mnt seen in the previous year. Hebei experienced the highest drop amongst the seven leading steel-making provinces as well.

The second-highest crude steel producing province, Jiangsu, saw a 3% y-o-y dip to 116 mnt against 119 mnt in this period. Jiangsu, which houses numerous electric arc furnaces (EAFs), is the second-largest province in China, and contributes over 10% of the country's total crude steel production.

Shandong is the third-largest steel producer which saw output remaining stable at 76 mnt y-oy. Liaoning came a close fourth but was also stable with 75 mnt.

The fifth-largest producer, Shanxi, showed a 5% decline with 64 mnt against 67 mnt seen in 2021.

Meanwhile, the two provinces bringing up the rear, Guangxi and Anhui, showed a positive trend, with production up 4% and 1% respectively.

Which are the top 7 crude steel producing provinces in China?

Factors keeping production under control

1. Covid surge, poor realty performance hit demand: The country ended 2022 with an overall 2% drop in crude steel production to 1,010.81 mnt against 1,031.05 mnt in 2021. This was mainly due to lower demand on account of the poor performance of the real estate sector and the unprecedented Covid surge which had again led to severe lockdowns and diminished demand.

China's steel imports were down 26% to 11 mnt last year against over 14 mnt in 2021, corroborating that lower demand reigned last year. Steel exports remained stable at around 67 mnt belying expectations that these would drop by 5-6 mnt. This also proved that lesser home demand led mills to retain their exports at 2021 levels.

2. Decarbonisation step-up: China is aiming to achieve peak emissions by 2030 and net zero by 2060 for which it has unveiled several strategies one of which is green steel-making.

As a result, crude steel production from the seven key provinces has been declining. The year 2021 saw strict capacity control too.

3. Hebei under strict orders to control production: The government has laid down norms that will effectively reduce carbon emissions. Under these rules, production capacities of energy-guzzling and pollution-spouting industries like steel, coal, cement and glass have been strictly directed to control production capacity. Hebei being the largest crude steel producing province is very much on the radar. Plans are afoot to build a clean energy base in northern Hebei and photovoltaic power generation application bases in Tangshan amongst other locations.

Outlook
Output may decrease in 2023 by nearly another 10 mnt compared to 2022. The decline will be mainly contributed by the blast furnace players as such capacities increasingly get replaced by greener options like EAFs and hydrogen-based methods. Of late, with the increase in energy costs, electric furnaces were under pressure and steel was mainly being produced through the blast furnace route.

Going forward, the share of EAFs will eventually expand.
Which are the top 7 crude steel producing provinces in China?

 

10 Feb 2023, 09:11 IST

 

 

You have 1 complimentary insights remaining! Stay informed with BigMint
;