Luo Tiejun, vice president of the China Iron and Steel Association (CISA), has stated at a meeting for the negotiation of medium and long-term contracts for coal, steel and coke for 2021 that the performance of China’s steel industry has been better than expected amid the policies and measures issued by Chinese government to cope with bad situation caused by the Covid-19 pandemic. He added that uncertainties and destabilizing factors are increasing for the coming year, and so he urged steelmakers to be cautious as regards expansion of production capacities.
According to the data issued by the National Bureau of Statistics (NBS), China’s crude steel output amounted to 874 million mt, up 5.5 percent year on year in the January-October period this year. China’s crude steel output only indicated a decline in March this year, while indicating growth in all the other months of the year, reflecting an enthusiasm for production on the steelmakers’ side amid booming infrastructure construction.
Moreover, the strong demand also stimulated steel imports, with China’s steel imports increasing by 74 percent year on year in the first ten months, while its steel exports decreased by 20 percent in the given period.
Mr. Luo said that the growth of steel consumption this year has been beyond market players’ expectations, though he added that the intensity of consumption might not continue and that market players should not be overly optimistic.
The rises in iron ore, coke and scrap prices have been rapid, indicating that steelmakers’ profitability will face challenges.