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From a country perspective, China remained the world's largest steel producer, with a crude steel output of 771 million tons, accounting for 46.3% of the global total. Japan, the United States, and India followed as the second, third, and fourth largest producers, with outputs of 107 million tons, 88.6 million tons, and 76.7 million tons respectively.
China’s Steel Production Growth Rate and Efficiency Drop Dramatically
Crude steel output in China showed a fluctuating trend throughout the year, starting strong and then declining. Pig iron production reached 658 million tons, while crude steel output totaled 771 million tons, both rising by 3.7% and 3.1% respectively. However, the growth rate of crude steel output was 5.8 percentage points lower than the previous year. In the first half of the year, steel production continued to rise, but it dipped in the second half, with an average daily crude steel output of 1.958 million tons.
Steel exports surged, while imports fell. Last year, China exported 55.73 million tons of steel, a 14% increase year-on-year, while imports dropped to 13.66 million tons, a decrease of 12.3%. Additionally, steel billet imports fell by 43.3% to 360,000 tons. As a result, net crude steel exports reached 44.4 million tons, up 27.6% from the previous year.
Steel inventories declined for ten consecutive months. The national social stock of major steel products, including steel plates, cold-rolled sheets, hot-rolled sheets, wire rods, and rebar, showed a fluctuating trend. By the end of December, total steel inventories were 11.88 million tons, down for the tenth straight month. Compared to the peak in February, this represented a cumulative drop of 7.06 million tons, or a 37.3% decrease.
Steel prices saw a downward trend overall. Prices initially rose in the first eight months of the year, only to fall later. In the final four months, there was a slight rebound followed by another decline. The average CSPI steel composite price index for the year was 111.76, a decrease of 19.28 points from the previous year, representing a 14.71% drop.
Iron ore prices rose sharply at the end of the year. China imported 744 million tons of iron ore, a 8.4% increase year-on-year. The average import price was $128.6 per ton, down by $35.4 per ton compared to the previous year. After reaching a three-year low in late September, iron ore prices oscillated before surging to nearly $160 per ton by the end of December.
Enterprise economic performance declined significantly. Key steel enterprises in China recorded total sales revenue of 3.54411 trillion yuan, profits and taxes of 74.089 billion yuan, and total profits of 1.581 billion yuan, all showing declines of 4.31%, 54.33%, and 98.22% respectively from the previous year. Throughout the year, the industry faced losses in January and February, turned slightly profitable in March through May, and returned to losses in June through September. Profitability improved in October through December, but the profit margin for large and medium-sized steel companies remained extremely low at just 0.04%.
Fixed asset investment growth slowed. Investment in China's ferrous metal mining and processing industry reached 152.9 billion yuan, up 23.7% year-on-year. Meanwhile, investment in the ferrous metal smelting and rolling industry decreased by 2% to 505.5 billion yuan.
Predicting the Outlook for the Steel Industry This Year
Despite some improvement in demand, the outlook remains uncertain. Luo Baihui, Secretary-General of the International Association of Mould & Hardware Plastics Suppliers, noted that China’s economy showed signs of stabilization and recovery in the fourth quarter of last year, which provided favorable conditions for the steel industry to maintain stable development this year. Overall, the first quarter of this year has seen a better operating environment than the previous year, with steel demand expected to rise. However, due to the large production base, market oversupply has not changed significantly.
Rising production costs make cost-cutting and efficiency improvements more challenging. Luo Baihui pointed out that quantitative easing policies in the US, Europe, and Japan have driven up international commodity prices, including iron ore and coal. This year, China will intensify energy conservation and emission reduction efforts, accelerate reforms in resource and energy pricing, and strengthen fiscal and tax policies. These measures will increase investment and operational costs for enterprises in energy conservation and environmental protection. Additionally, financial pressures on companies are expected to persist, leading to higher capital costs.
Trade tensions have escalated, making steel exports more difficult. Last year, 9 trade remedy investigations were launched against Chinese steel products, reflecting a sharp increase in such cases. Countries like the US, Canada, the EU, and Australia initiated these actions, and now ASEAN and Brazil have also become key players. With the global economy recovering slowly, China’s steel exports are likely to face greater challenges this year.
“China’s steel industry has made remarkable achievements in recent years and has become a true steel power,†said Luo Baihui. He emphasized that the current overcapacity and sluggish operations in the industry necessitate urgent restructuring and transformation.
As early as October 2011, the Ministry of Industry and Information Technology issued the "Twelfth Five-Year Development Plan for the Iron and Steel Industry," outlining strategic goals and priorities for the sector. Key areas during the plan period included accelerating product upgrades, deepening energy conservation and emissions reductions, enhancing technological innovation, and phasing out outdated production capacity. Drawing on foreign advanced technologies and management practices will help facilitate a smoother transition for China’s steel industry.
It is hoped that China’s steel industry can successfully complete its transformation and upgrading, truly becoming a global steel power, and I am willing to contribute to its continued development.
Abstract According to the World Steel Association, global crude steel production last year reached 1.55 billion tons, marking a 1.2% increase compared to the previous year. The annual capacity utilization rate stood at 78.2%, a decline of 1.7 percentage points from 2011. Regionally, production increased in the Middle East, Asia, and North America, while Europe, South America, and Oceania experienced declines.