China's steel production speeds up in the second half of 2020

In the first half of this year, China's steel production continued to grow. According to statistics, the national pig iron production from January to April was 279.79 million tons, an increase of 1.3% year-on-year; the crude steel output was 319.46 million tons, an increase of 1.3%. The latest statistics of the China Iron and Steel Industry Association show that in the second half of May 2020, key steel companies crude steel day The average output is 2.0925 million tons, which has already approached the historical peak in mid-September 2019 (2.105 million tons), an increase of 121,000 tons from the previous month, an increase of 0.58%. It is expected that the steady growth of national pig iron and crude steel output will not change in the first half of the year, and the year-on-year growth rate will be around 2%.

The acceleration of China's steel production in the second half of the year was mainly driven by the following three forces:

The first is strong domestic demand. Since the beginning of this year, despite the impact of the "epidemic", domestic demand for iron and steel has been steadily increasing. After entering the second half of the year, China steel demand will continue to increase due to factors such as counter-cyclical adjustment policy effects, full recovery of construction and industrial production, and entering the traditional peak consumption season, which will drive the apparent consumption growth of crude steel to 3 %the above. In this way, the apparent annual consumption of crude steel will be close to the level of 1 billion tons.

Secondly, steel export demand will improve. Because of the severe impact of the epidemic, the national steel export volume fell by 14% from January to May this year, of which the decline in the first two months reached 27%. This situation is expected to improve in the second half of the year. This is mainly because some countries are now forced to "unblock" and resume production in spite of the threat of the epidemic. Although this move is very risky, it can objectively stimulate the economic recovery temporarily and improve China's steel export demand environment in the second half of the year. This includes its There are two aspects of direct export and indirect export. It is expected that the decline in national steel exports will continue to narrow in the second half of the year, and may even turn down to rise.

Finally, there is more replacement capacity. Generally speaking, production capacity is the basis of output. In recent years, the country has added a lot of advanced production capacity in the name of capacity replacement, many of which will be put into operation in the second half of this year, which makes the steel output engine more powerful in the second half of the year. At the same time, the national steel sales prices continued to rise in the first half of this year, and the profit level per ton of steel was not low. It would also stimulate steel companies to actively produce, increase capacity utilization, and achieve greater steel production in the second half of the year.

It can be seen that more vigorous consumer demand, a larger number of production capacity bases and profitable product sales prices have jointly promoted the acceleration of China's steel production in the second half of the year.