China's Steel Consumption Hit A Record High Last Year, Crude Steel Production Accounted For Nearly 57% Of The World

On January 27, the China Iron and Steel Association (hereinafter referred to as China Iron and Steel Association) announced the above news at the 2020 annual information conference.

According to calculations by the China Iron and Steel Association, in 2020, China's apparent consumption of crude steel will increase by 9% year-on-year. The actual consumption of steel increased by about 7% year-on-year, of which steel consumption in the construction industry increased by 10% and the manufacturing industry increased by 4%.

According to data released by the Metallurgical Industry Planning and Research Institute, China's steel consumption in 2019 is expected to be 886 million tons, a year-on-year increase of 7.3%. Among them, steel consumption in the construction industry is expected to be 478 million tons, an increase of 11.2% year-on-year, accounting for "half of the country" in steel consumption.

Qu Xiuli, vice chairman and secretary-general of the China Iron and Steel Association, said at the meeting that the national economy showed a gradual recovery last year, especially after the second quarter, as the country resumed work and production and stabilized the economic policy gradually, major project investment was launched and machinery The rapid recovery of downstream industries such as, automobiles, home appliances, and the continuous improvement of economic indicators closely related to steel consumption have prompted steel consumption to reach new highs.

China Steel Association predicts that China's steel demand will maintain a small increase in 2021.

According to data released by the National Bureau of Statistics, China's crude steel output in 2020 was 1.053 billion tons, an increase of 5.2% year-on-year, breaking through the 1 billion tons mark for the first time, setting a record high. The output of steel was 1.325 billion tons, a year-on-year increase of 7.7%.

In terms of quarters, the crude steel output increased by 1.2% and 1.7% in the first and second quarters, and 10.3% and 8.8% in the third and fourth quarters. Except for March, which was severely affected by the epidemic, all other monthly output achieved year-on-year growth.

The volume and price of imported iron ore, the main raw material for steel production, rose last year.

In 2020, China imported 1.17 billion tons of iron ore, a year-on-year increase of 9.5%; the average import price was US$101.7/ton, a year-on-year increase of 7.2%.

Qu Xiuli said that on January 18, China's imported iron ore price index of 62% iron grade rose to US$171.6/ton, a nine-year high.

Due to rising raw material prices, steel prices gradually rebounded last year, but the overall level was lower than in 2019. According to data from the China Iron and Steel Association, China's steel price index last year averaged 105.57 points, a year-on-year decrease of 2.24%.

According to the China Iron and Steel Association, the sales revenue of key steel companies last year was 4.7 trillion yuan, a year-on-year increase of 10.86%; sales costs were about 4.24 trillion yuan, a year-on-year increase of 11.57%; total profits were 207.4 billion yuan, a year-on-year increase of 6.59%.

But profit margins have declined. "The average sales profit rate last year was 4.41%, a year-on-year decrease of 0.18 percentage points." Qu Xiuli said.

According to data released by the World Steel Association on January 27, global crude steel production reached 1.864 billion tons in 2020, a year-on-year decrease of 0.9%.

The annual crude steel output in Asia reached 1.374.9 billion tons, a year-on-year increase of 1.5%.

Among them, China's crude steel production accounted for the share of global crude steel production, rising from 53.3% in 2019 to 56.5% in 2020.

At the 2020 industry and informatization development briefing held by the State Council Information Office on January 26, Huang Libin, spokesperson for the Ministry of Industry and Information Technology and director of the Operation Monitoring and Coordination Bureau, said that steel production will be reduced in four aspects. Including prohibiting new steel production capacity, researching and formulating new capacity replacement measures and project filing guidelines, advancing industry mergers and reorganizations, and resolutely reducing steel production.

Huang Libin stated that it will focus on achieving the phased goals of carbon peak and carbon neutrality, gradually establish an inventory restriction mechanism based on carbon emissions, pollutant emissions, and total energy consumption, and study and formulate relevant work plans to ensure full realization in 2021. Steel output fell year-on-year.

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