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Nvidia’s China Return Fuels Steel Demand Optimism: Plant Activity Analysis

China’s steel market shows cautiously positive signs, potentially influenced by developments in the tech sector. Specifically, the resumption of Nvidia’s AI chip sales in China, as reported in “Nvidia darf wieder KI-Chips nach China liefern” and “Wall Street Cheers Nvidia’s Return To China AI Market“, coupled with broader market reactions described in “Stock market today: S&P 500, Nasdaq climb on Nvidia boost, with CPI inflation, bank earnings in focus“, could signal increased industrial activity and demand for steel. The relationship between increased Nvidia sales and increased production at the observed steel plants can only be speculated on, since no direct connection could be established.

Bar chart and satellite map of steel production activity in China

The mean steel plant activity in China fluctuated, peaking at 46% in May before declining to 30% in July. Chengyu Vanadium & Titanium Technology Co., Ltd. shows relatively stable activity, ranging from 43% to 46%, without a clear trend and staying consistently above the national mean. Cangzhou China Railway Equipment Manufacture Material Co., Ltd. maintains consistently high activity at 68% throughout the observed period, significantly exceeding the national average. Shandong Laigang Yongfeng Steel Co., Ltd. showed a rising trend from January to July, increasing from 54% to 62%, also outperforming the mean activity.

Chengyu Vanadium & Titanium Technology Co., Ltd., located in Sichuan, has a crude steel capacity of 6 million tonnes per annum (ttpa), relying on integrated BF-BOF production. Its activity has been relatively stable, fluctuating only slightly between 43% and 46% over the observed months. The company produces vanadium-containing hot-rolled ribbed steel bars and steel wire rods. No direct connection could be established between the stability of the plants activity and the news articles.

Cangzhou China Railway Equipment Manufacture Material Co., Ltd., situated in Hebei, boasts a crude steel capacity of 7.5 million ttpa, also utilizing integrated BF-BOF processes. Its activity has remained consistently high at 68% for the observed months. The plant produces high-quality carbon structural and low-alloy high-strength hot-rolled coils, catering to the tools, machinery, and transport sectors. No direct connection could be established between the activity levels and the news articles.

Shandong Laigang Yongfeng Steel Co., Ltd., located in Shandong, features a smaller crude steel capacity of 2.7 million ttpa, utilizing integrated BF-BOF production. Its activity levels have shown a generally rising trend, increasing to 62% in July. The company produces bars and high-speed wire products. No direct connection could be established between this trend and the news articles.

Evaluated Market Implications:

The potential for increased demand for steel used in manufacturing and infrastructure (indirectly linked to AI hardware manufacturing and deployment), suggests a cautiously optimistic outlook. While Cangzhou China Railway Equipment Manufacture Material Co., Ltd. has exhibited consistently high activity, suggesting a stable supply, the broader fluctuation in mean steel plant activity and activity increase in Shandong Laigang Yongfeng Steel Co., Ltd, necessitates vigilance.

Recommended Procurement Actions:

  • Monitor Cangzhou China Railway Equipment Manufacture Material Co., Ltd. supply chains: Given its consistently high activity and production of high-quality carbon structural and low-alloy high-strength hot-rolled coils used in the transport sectors, buyers should secure contracts to ensure a reliable supply of these materials, especially if anticipating increased demand driven by sectors that consume these specific steel products, such as the railway equipment sector.
  • Maintain close communication with Shandong Laigang Yongfeng Steel Co., Ltd.: Given its rising activity and potential role in supplying niche steel products, buyers should maintain open communication to quickly react to demand shifts as signaled by news events such as “Nvidia darf wieder KI-Chips nach China liefern“.