During his presentation at the SteelOrbis Spring '07 Conference & 56th Irepas Meeting, Mr. Chi Jingdong of CISA (
China Iron and Steel Association) referred to the considerable contribution of the Chinese steel industry to the strong and rapid growth of the national economy as well as of the global economy. The country is currently ranked as the biggest steel producer worldwide, and has the highest level of steel
consumption. For 2006,
China's
production figure was recorded at 420 million mts.
China plays a very important role in international
trading, boosted by its high level of activity in the fields of steel import and export.
The growth in
China's steel making capacity started to boom back in 2000. By 2006, year on year growth of crude steel
production has risen to 19.7 %. Finished steel
production increased by 24.45 %,
iron ore production rose by 37.99 %, while outputs of metallurgical coke and ferroalloys rose by 17.35 % and 30.93 % respectively. Although all these
production figures indicate growth, Mr. Chi Jingdong emphasized the decline observed in the growth rates of
pig iron and crude steel
production, by 6.1 % and 8.4 % respectively.
China is now equipped with annual
production capacity of 460 million mts of crude steel, 430 million mts of
pig iron and 520 million mts of finished steel. In recent years, the ratio of flat rolled steel to total output has started to improve, moving up by 3.04 % to reach 41.70 % in 2006 – the first time ever the 40 % threshold was exceeded. The ratio of long products in the meantime saw a retreat of about 3.1 % in 2006 – dropping below the 50 % barrier for the first time.
Steel
production in
China is also tending towards increased output of rebars among the other types of long products.
In December 2006, the comprehensive price index in the Chinese steel market rose 10.97 points year on year, up 11.65 % compared with last year. The 2006 price index for long products increased by only 1.1 % compared with 2005.
According to Mr. Chi, by the end of December 2006, the world long products price index reached 150.8 points, while the Chinese long products price index reached 91.8 points, thus indicating that the international price level is 40 % higher than that of
China.
The ratio of Chinese to world steel output is in rapid growth. In 2000, the ratio of
China's steel output to the world output stood at 15.2 %, but by 2006 this had jumped up to 34.3 %. The steel output increase resulted from the rapid rise in
consumption in the Chinese market.
China's 2006 crude steel
consumption reached 384.53 million mt, up 8.13 % year on year. Meanwhile, finished steel
consumption totaled 442.36 million mt, up 14.36 %. The growth of
China's crude steel
consumption and finished steel
consumption has now become more stable.
From 2001 to 2005,
China's cumulative imports of finished steel totaled 133.99 million mt, while exports totaled 51.9 million mt, resulting in net imports of 82.09 million mt. In 2006, the situation of net imports was replaced by one of net exports, leading to a growing impact on Chinese steel
production and market
consumption.
Throughout 2006, imports to
China maintained a stable trend, around 1.5 million mts while the exports were climbing, marking a particularly sharp rise in April due to the expectations of the tax rebate adjustment. Monthly exports started the year at around 1.8 million mts, then hit 4.4 million mt in April, before continuing a gradual rise up to the end of the year and finally reaching 5.5 million mts by December.
Chinese
flats exports increased 141.1 % in 2006, reaching 20.37 million mt - accounting for 47.4% of
China's total steel exports. Exports of steel bar reached 11.069 million mt, up 81.7 % - accounting for 25.7 % of total exports, pipes reached 6.41 million mt, up 82.7 % - accounting for 14.9% of total exports. Combined exports of
flats and pipes reached 26.78 million mt - accounting for 62.3 % of
China's total steel exports.
According to the official figures, the growth of long products
consumption in
China slowed down a little from 23.4 % to 14.3 %; output growth changed from 23.0 % to 17.6 %. Imports of long products increased 96.4 % to 1.62 million mt, while exports increased 978.0 % to 13.99 million mt.
Based on the “Eleventh Five Year Plan”, CISA predicts that 2010 steel
consumption will reach 470 million mt (440 million mt for finished steel), with a 7.5 % GDP annual growth.
Mr. Chi said that market demand is the root factor for the Chinese steel industry. As long as there is demand from the market,
China aims at improving the quality of its products to suit this demand.
China is thus concerned with improving its product quality and with the achievement of sustainable development.