production drops 2%, exports stable
pellet imports down 26% y-o-y in CY22
drop y-o-y across raw materials, semi- and finished products
supplies lift coking coal imports by 14%
China's steel industry, the year 2022 was characterized by an overarching
downtrend. Steel consumption was down, so was crude steel production. Prices
across the board showed a decline. SteelMint goes behind the scenes:
Lower demand pulls down production
steel production was down by around 24 mnt y-o-y while around 4 million tonnes
(mnt) less of steel were imported last year owing to lower consumption.
country ended 2022 with a 2.34% drop in crude steel production to 1,006.92
million tonnes (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.
China's steel imports were down a sizeable 26% to 11 mnt last year against over
14 mnt seen in 2021, which was again a pointer to the lower demand levels that
reigned last year.
steel exports remained stable at around 67 mnt belying expectations that these
would drop by 5-6 mnt since China has adopted a policy of exporting value-added
steel rather than commercial grades. This again proved that because of lesser
home demand, mills sustained their exports at 2021 levels.
remained stable because of the Russia-Ukraine conflict. Russian and Ukrainian
steel exports were badly hit last year which allowed China to take over some of
China's pellet imports drop sharply amid India's duty
imports into China dropped a sharp 26% to around 17 mnt last year in comparison
to 23 mnt in 2021. Iron ore imports were stable at 1,096.63 mnt (1,103.11 mnt).
Imports declined in response to the 45% export duty that India had imposed in
May, 2022. India has been the largest pellet exporter to China in the last two
years, but its iron ore and pellet exports plunged 58% last year.
domestic iron ore production was up 4% to 1,000.38 mnt last year (959 mnt in
2021) despite the drop in consumption. This was mainly for two reasons. One,
China's own iron ore is of low grade and merely 30-40% of the same can be
utilised in steel-making. Hence, it would require producing more volume to
achieve a usable level for steel-making.
Russian imports inflate coking coal imports
coal imports were up by 14% in CY22 to over 62 mnt against 55 mnt recorded in
the preceding year. This was mainly due to cheap imports from Russia. As the
western sanctions tightened around Russia, it went searching for alternate
markets, and a key one was China.
apart, China faced issues with regard to supply from Mongolia which further
offered scope for Russian imports.
Ferrous scrap imports dip
scrap imports dipped 5% y-o-y to 0.47 mnt in 2022 (0.50 mnt in 2021) mainly
because of the decline in Japanese exports of the same. China buys scrap from
Japan, but the latter's own scrap generation declined because of the
deceleration in its auto sector amid a global slowdown and its own increased
steel prices were on the higher side till July last year, but started showing a
downtrend from August amid the global slowdown but recouped once again in
December, 2022 in tandem with global trends.
ore: Prices of this steel-making raw material
were down 25% y-o-y to $120/t , CFR compared to $150/t in 2021.
- Scrap: Ferrous
scrap import prices were down 11% to RMB 3,235/t compared to RMB 3,620/t.
- Semi and finished steel: All
showed a downtrend. Billet prices dropped 13% y-o-y to RMB 4,100/t in 2022
against RMB 4,711/t in 2021. Rebars also lost 13% y-o-y to RMB 4,374/t in
2022 against RMB 5,015/t in the year before while HRC prices went down 16%
y-o-y to RMB 4,622/t in 2022 against RMB 5,489/t in 2021.
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.
towards this end, Baoshan Iron & Steel (Baosteel), the listed arm of the
world's top steelmaker, China Baowu Steel Group, signed a memorandum of
understanding with Beijing Benz Automotive Co (BBAC) to jointly build a
low-carbon and green auto steel supply chain by using greener raw materials for
automobile production. Baosteel, thus, will become the very first steel
producer in China to supply steel with significantly-reduced carbon emissions
to automakers from 2023, as per a release. Starting 2026, Baosteel will reduce
carbon emissions of steel used in vehicles by 50-80% via the hydrogen-based
shaft furnace-electric-arc furnace process, compared with traditional
steelmaking. And it will provide green steel with carbon reduction by 95% in
company aims to achieve carbon peaking in 2023, and reduce carbon intensity by
30% in 2035, followed by carbon neutrality by 2050.