WSD Strategic Insights LXIII: Is Chinese steel production a reality?

Monday, 16 November 2015 14:10:30 (GMT+3)   |   San Diego
       

Chinese steel production in 2015 can be broken down into five categories, two of which seem to be positioned to continue to rise, and three of which seem to plummet by 2018.  The categories are as follows:  a) EAF steelmakers that are CISA members; b) smaller blast furnace/BOF steelmakers; c) small EAF non-CISA steelmakers; d) CISA steelmakers in coastal locations; and e) CISA steelmakers located inland.  Overall by 2018, gross capacity declines by 20% to 850 million mt from 1.06 million mt in 2015; and, ECO-Capacity declines 17% to 780 million mt from 940 million mt in 2015.  Eco-Capacity is economic, efficient and ecological capacity.  It’s the level of steel production that can be attained, when production is rising, before there’s a sizable rise in the cost to produce the last tonne while Gross capacity is engineered capacity.

Chinese Steel Production, Gross and Effective Capacity in 2015 and 2018
(million tonnes)
 

Year

2015

Steel

Production

2015 Gross Cap

2015

ECO-

Cap

 

2018

Steel

Production

2018

Gross

Cap

2018

ECO-Cap.

(Change)**

 

 

 

 

 

 

 

 

Small EAF non-CISA

 

15

 

35

 

25

 

 

5

 

10

 

  5 (-20)

EAF CISA

45

60

60

 

55

70

 60  (0)

Small BF/BOF

Non-CISA

 

105

 

150

 

130

 

 

45

 

70

 

  60 (-70)

CISA Coastal

120

140

125

 

145

165

155 (+30)

CISA Inland

515

680

600

 

450

535

500 (-100)

TOTALS

800

1,065

940

 

700

850

780 (-160)

 
Source: WSD Estimates/CISA
 
 
 

This report includes forward-looking statements that are based on current expectations about future events and are subject to uncertainties and factors relating to operations and the business environment, all of which are difficult to predict.  Although we believe that the expectations reflected in our forward-looking statements are reasonable, they can be affected by inaccurate assumptions we might make or by known or unknown risks and uncertainties, including among other things, changes in prices, shifts in demand, variations in supply, movements in international currency, developments in technology, actions by governments and/or other factors.

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Copyright Ó 2015 by World Steel Dynamics Inc. all rights reserved 

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