Domestic producers lead charge in Chinese electric steel

Domestic producers lead charge in Chinese electric steel

China produced 1.977 million metric tons of electric steel in the first ten months of this year, up 45.8 percent on a year on year. Imports during the first ten months fell 25.8 percent year on year to 1.042 million metric tons, while exports rose 13.8 percent to 82’000 metric tons. Combining domestic production with net imports, China’s apparent consumption through the end of October stood at 2.937 million metric tons. This represents a rise of up 9.2 percent year on year in apparent consumption if inventory is not taken into account. While domestically produced products have been replacing imported electric steel products, the growth rate of electric steel’s apparent consumption is rather slow in comparison with other steel products. At present, only Wuhan Steel produces cold rolled oriented grade silicon steel. Wuhan’s current annual capacity for cold rolled silicon steel is 120’000 metric tons for oriented grades and 380’000 for non-oriented grades. Wuhan intends to bring 680’000 metric tons of new capacity on stream by the end of this year. 100’000 metric tons of that new capacity will be cold rolled oriented silicon steel. Baosteel produces cold rolled non-oriented silicon steel with an annual capacity of 500’000 metric tons. Taiyuan Steel produces hot and cold rolled non-oriented silicon steel with an annual capacity of 100’000 metric tons. Other medium and small-sized steelmakers, Nanjin Steel and Chongqing Steel for instance, only produce hot rolled silicon steel. The combined capacity of these other medium and small-sized steelmakers is around one million metric tons. A production line of cold rolled silicon steel in Angang was brought on stream last year. While the line’s anticipated capacity is 800’000 metric tons per year, it is currently operating at a steady rate of 30’000 metric tons per month. Pan Zhihua Steel’s recent trial run of cold rolled non-color coated and non-oriented electric steel was successful; however, its capacity is unknown. The newly added capacity over the next year is expected to be over 1.2 million metric tons. Wuhan’s addition of 100’000 metric tons of cold rolled oriented silicon steel capacity will greatly alleviate the short supply in the domestic market, which will in turn lower the import volume. Furthermore, the large production volume of cold rolled non-oriented silicon steel may not only cut into the hot rolled silicon steel market, but it too may make the chance of import slim. SteelOrbis Shanghai