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Try the Free AI Search EngineChina Steel: Production Declines, Exports Rise, and Plant Activity Shifts Signal Market Adjustments
China’s steel market is experiencing a complex interplay of declining production and rising exports amid global overcapacity. “Global steel production fell by 5.9% in October%” reports a significant year-on-year decrease, with China experiencing a notable 12.1% drop. This decline is further emphasized by “Pressure on steel supplies to China remains despite falling production,” highlighting that despite reduced output, downward price pressure persists due to excess capacity and growing Chinese exports. No direct relationship to observed stainless steel production in China as described in the article: “Global stainless steel production in January-September increased by 3% y/y” can be established with the activity levels of the three observed carbon steel plants.
The mean steel plant activity in China shows a significant drop in October, falling from 43% in September to 25%. Shandong Taishan Steel Group Co., Ltd. consistently operates well below the mean, with activity levels fluctuating between 17% and 13% over the observed period, showing a continous decline. Baowu Group Echeng Iron and Steel Co., Ltd. started below the mean, but increased activity up to 44% in October. Jilin Jianlong Steel Co., Ltd. operates significantly above the mean, decreasing from 74% in June to 67% in October.
Shandong Taishan Steel Group Co., Ltd., an integrated steel plant with a crude steel capacity of 5,000 ttpa, primarily produces finished rolled products like hot and cold rolled coil, and stainless steel. Its activity has been consistently low and decreasing (17% in June to 13% in October) compared to the Chinese average, but no direct connection can be established between these activity levels and the news articles about declining steel production and downward price pressure.
Baowu Group Echeng Iron and Steel Co., Ltd., an integrated steel plant located in Hubei with a crude steel capacity of 4,400 ttpa, focuses on finished rolled products, including spring steel and high-strength ring chain steel. The plant’s activity increased from 29% in June to 44% in October, moving above the national mean. This activity increase is despite news of declining national crude steel production as reported in “Global steel production fell by 5.9% in October%”.
Jilin Jianlong Steel Co., Ltd., another integrated steel plant based in Jilin with a crude steel capacity of 3,000 ttpa, produces automotive structural steel and pipeline steel. The plant’s activity, while declining slightly from 74% in June to 67% in October, remains significantly above the national average. No direct connection can be established between these high activity levels and the news articles about declining steel production and downward price pressure.
The decline in the mean activity level, along with the news article, “Global steel production fell by 5.9% in October%”, highlights a potential supply disruption in the Chinese steel market. However, the simultaneous rise in export volumes indicated by “Pressure on steel supplies to China remains despite falling production,” suggests this drop in domestic production may not translate into immediate price increases for international buyers. Procurement professionals should closely monitor export volumes and domestic demand indicators in China. Given the observed increase in activity at Baowu Group Echeng Iron and Steel Co., Ltd., buyers should consider diversifying their supply sources to include this plant, particularly for products like spring steel and high-strength ring chain steel, to mitigate potential risks associated with broader market fluctuations.