Regarding Chinese economy and Chinese steelmakers who are recovering faster than its rivals from the pandemic, Katsuhiro Miyamoto, executive vice president of Japan-based Nippon Steel Corporation has stated that Japanese steelmakers are used to producing high quality steel instead of competing with China, however now it is changing as Chinese steelmakers are also seeking high-end technology. “We must stay ahead of them,” Miyamoto said.
According to company’s official, Chinese mills’ earnings supported by strong domestic demand enables them to spend more money on developing new products. While China posted record steel production volumes, Nippon Steel and other Japanese mills are still seeing the effects of the pandemic on their production volumes. Nippon Steel idled some of its blast furnaces amid lower demand and the furnaces are not likely to resume operations until March, however if demand picks up faster, the company may take action accordingly.
As a natural result of China’s record production volumes, the country’s iron ore demand is also strong, which leads to higher iron ore prices, also because of Sino-Australian tension which resulted in congestion of iron ore ships entering Chinese ports. However, iron ore prices are expected to soften with rising output.