Abstract According to U.S. media, China’s crude steel output in November reached its lowest level in a single month since 2013. The drop was attributed to both seasonal factors and government policies aimed at curbing overcapacity in the steel industry. The Wall Street Journal reported on December 11 that China’s steel production remains a major driver of global industrial demand and has a significant impact on iron ore prices, which are essential for steelmaking.
China’s National Bureau of Statistics released data showing that the country produced 60.9 million tons of steel in November, marking a 6.5% decline from October — the lowest monthly output since December 2012. Analysts from Steel Index noted that the reduction was partly due to slower construction activity during the winter months, which led to lower steel demand.
The shift in China’s economic strategy from investment-driven growth to one focused on domestic consumption and innovation is also affecting the steel sector. While infrastructure projects have historically boosted demand for steel, this transition may lead to long-term changes in the industry.
In response to these challenges, the Chinese government announced new measures in November to further reduce steel production capacity, including extending deadlines for suspended projects. Some steel mills have already shut down as regions implement stricter environmental regulations. In northern Hebei Province, authorities dismantled a steel plant in November as part of ongoing efforts to cut pollution and excess supply.
Lin Shuyi from Fitch Ratings in Singapore stated that as China transitions to a more consumption-driven economy, long-term metal demand could slow. However, some analysts believe the current policy shift won’t immediately impact steelmakers. Platts Energy, a commodity information provider, pointed out that the Hebei mill shutdown only affected a small portion of the country’s total steel capacity, which stands at around 1 billion tons annually.
Despite the decline in November, China’s steel output for the year is still expected to surpass last year’s record of 716.5 million tons. The first 11 months of 2023 saw 713 million tons of steel produced, driven by strong output in the third quarter.
The report highlights that China continues to rely on infrastructure investment to drive economic growth, which supports steel and iron ore demand. In November, China imported a record 77.8 million tons of iron ore, mostly from Brazil and Australia. This surge in imports helped push iron ore prices higher after a period of decline.
To support steel mills, the Chinese government introduced a policy in the summer to ease iron ore imports. By July, 68 new importers had obtained qualifications, bringing the total number of approved importers to 118.
While reducing reliance on heavy industries could slow overall economic growth, experts say it will take time for these changes to fully materialize. For now, the steel sector remains a key component of China’s industrial landscape, even as the country navigates a complex transition toward a more sustainable economic model.Aging Test Machine,Aging Test Chamber,Aging Testing Machine,Ultraviolet Uv Light Accelerated
Dongguan Best Instrument Technology Co., Ltd , https://www.best-tester.com