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Abstract According to the World Steel Association, global crude steel production reached 1.55 billion tons last year, representing a 1.2% increase compared to the previous year. However, the annual capacity utilization rate dropped to 78.2%, a decrease of 1.7 percentage points from 2011. Regionally, production in the Middle East, Asia, and North America saw growth, while Europe, South America, and Oceania experienced declines.
Last year’s global steel output reflected a mixed performance across regions. The Middle East and Asia showed strong growth, driven by industrial expansion and infrastructure projects. North America also saw an upward trend, whereas European markets struggled with overcapacity and weak demand. In contrast, South America and Oceania faced declining production due to economic slowdowns and reduced industrial activity.
From a country perspective, China remained the world's largest steel producer, accounting for 46.3% of global crude steel output at 771 million tons. Japan, the United States, and India followed, with outputs of 107 million, 88.6 million, and 76.7 million tons respectively. These figures highlight the dominance of Asian countries in the global steel market.
China’s steel production growth slowed significantly in 2023. While crude steel output rose by 3.1% year-on-year, the growth rate was 5.8 percentage points lower than the previous year. The production trend showed an initial rise in the first half of the year, followed by a decline in the second half. The average daily crude steel output stood at 1.958 million tons, reflecting a more stable but less dynamic production environment.
Steel exports increased sharply, with 55.73 million tons exported in 2023—an increase of 14% compared to 2022. Imports, however, fell by 12.3% to 13.66 million tons. This led to a net export of 44.4 million tons, up by 27.6% from the previous year. The drop in steel billet imports further underscored the shift in domestic supply and demand dynamics.
Steel inventories continued to decline for the tenth consecutive month, reaching 11.88 million tons by the end of December. Compared to the peak in February, this marked a cumulative decrease of 7.06 million tons, or 37.3%. This trend indicated a more balanced market, with lower stock levels helping to stabilize prices.
Steel prices experienced a downward trend throughout the year. After an initial rise in the first eight months, prices fluctuated, showing slight rebounds and subsequent declines. The CSPI steel composite price index averaged 111.76 points in 2023, down 14.71% from the previous year. This decline reflected weaker demand and oversupply in key markets.
Iron ore prices, on the other hand, saw a sharp rebound at the end of the year. Despite an 8.4% increase in imports, the average price per ton fell by $35.4 to $128.6. Prices fluctuated after hitting a three-year low in late September, only to surge again near $160/ton by the end of December. This volatility highlighted the sensitivity of the steel industry to global commodity trends.
The economic performance of steel enterprises deteriorated significantly. Key steel companies reported a 4.31% drop in total sales income, a 54.33% decline in profits and taxes, and a staggering 98.22% drop in total profit compared to the previous year. Profit margins were particularly tight, with large and medium-sized companies achieving only a 0.04% profit margin.
Fixed asset investment in the steel sector showed mixed results. Investment in iron ore mining and processing increased by 23.7%, while smelting and rolling industries saw a 2% decline. These figures indicated a shift in focus towards upstream operations, as companies sought to secure raw material supplies amid rising costs.
Looking ahead, the outlook for the steel industry remains cautiously optimistic. While demand is expected to improve, oversupply issues persist. Production costs continue to rise, making efficiency improvements increasingly challenging. Trade tensions are also on the rise, complicating export efforts.
Experts like Luo Baihui emphasize the need for structural reforms in the industry. With overcapacity and sluggish operations, transformation and innovation have become essential for long-term sustainability. Government policies, such as the "Twelfth Five-Year Development Plan," aim to promote energy efficiency, technological upgrades, and environmental protection.
As China continues its journey toward becoming a true steel power, the industry must navigate these challenges with resilience and strategic planning. The path forward will require sustained effort, collaboration, and adaptability to ensure a more efficient and sustainable steel sector.