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China Steel Market Reacts Positively to US Trade Deal Hopes: Xinji Aosen Ramps Up Production

China’s steel market sentiment is positive amidst signs of easing trade tensions with the US. The shift follows news of “Zölle und Tiktok: Offenbar Annäherung zwischen China und den USA” and “Vorläufige Einigung im Zollstreit zwischen USA und China“, suggesting potential tariff reductions and improved trade relations. While a direct link between the news articles and the observed plant activities cannot be definitively established, the overall sentiment appears correlated with increased production at some major plants.

Bar chart and satellite map of steel production activity in China

The mean steel plant activity in China initially showed growth from May (34%) to August (44%), remained stable through September (43%) and then decreased sharply in October (25%). In contrast, Inner Mongolia Yaxin Longshun Special Steel Co., Ltd. maintained a relatively stable activity level around 58-60% throughout the observed period. Pingxiang Pinggang Anyuan Iron & Steel Co., Ltd. saw activity peaking at 68% in July and August but dropped to 53% in October. Xinji Aosen Iron and Steel Group Co., Ltd. exhibited a notable increase, peaking at 100% in October, significantly above the national average.

Inner Mongolia Yaxin Longshun Special Steel Co., Ltd., a major integrated steel producer in Inner Mongolia with a 2000 ttpa crude steel capacity via BOF, demonstrates consistent production levels. The plant, certified for ResponsibleSteel, primarily produces high-strength anti-vibration rebar and high-speed coil screw. Its stable activity, remaining around 58-60% throughout the period, does not show any immediate impact from the news surrounding the US-China trade discussions.

Pingxiang Pinggang Anyuan Iron & Steel Co., Ltd., based in Jiangxi, operates as an integrated steel plant with a capacity of 2650 ttpa of crude steel via BOF. Specializing in steel bars, high-speed wire rods, small products, and medium-thick plates for building, infrastructure and transport, its activity peaked at 68% in July and August but then decreased to 53% in October. While “Vorläufige Einigung im Zollstreit zwischen USA und China” hints at eased trade tensions, its direct impact on Pingxiang Pinggang Anyuan Iron & Steel Co., Ltd. is not explicitly evidenced in the activity data.

Xinji Aosen Iron and Steel Group Co., Ltd., a Hebei-based integrated plant with 3600 ttpa crude steel capacity via BOF, experienced a substantial increase in activity, reaching 100% in October. Specializing in semi-finished (billets, slabs) and finished rolled products (high-speed wire rods and hot-rolled strip products), the observed peak could potentially reflect increased export orders anticipated from a resolution to the US-China trade dispute discussed in “Zölle und Tiktok: Offenbar Annäherung zwischen China und den USA”. The article “USA und China: Ukraine, Zölle, Chips – worüber Trump und Xi sprachen” generally highlights the complex nature of interactions between the USA and China, but doesn’t establish any explicit, direct connection to the activity shifts.

Given the news of potential tariff reductions and the observed surge in production at Xinji Aosen Iron and Steel Group Co., Ltd., steel buyers should consider:

  • Securing contracts for high-speed wire rods and hot-rolled strip products from Xinji Aosen Iron and Steel Group Co., Ltd. immediately. The plant’s capacity is fully utilized, suggesting potential for increased lead times or price increases if demand rises further due to eased trade restrictions.
  • Monitoring Pingxiang Pinggang Anyuan Iron & Steel Co., Ltd.’s future activity. The October drop to 53% could indicate potential future supply constraints for steel bars, high-speed wire rods, small products and medium-thick plates within the building, infrastructure and transport sectors if the trade deal leads to a surge in domestic demand.