China’s Crude Steel Output Recovers in April
Strategic Research Institute
Published on :
17 May, 2022, 6:42 am
National Bureau of Statistics announced that China produced 92.78 million tonnes of crude steel in April 2022, up from 88.3 million tonnes in March 2022 but down by 5.2% YoY from April 2021 as the impact of environmental restrictions and COVID-19 disruptions eased, but it was still well below year-ago levels. The rising output came after mills in northern China finished production cuts the government ordered in mid-March, while a raw material supply crunch due to transport restrictions also gradually eased.
China's output of pig iron & finished steel was 76.78 million tonnes & 114.83 million tonnes, up 7.2% MoM & down 1.8% MoM respectively.
In the January-April 2022, China’s outputs of pig iron, crude steel and finished steel amounted to 280.3 million tonnes, 336.15 million tonnes and 426.82 million tonnes, decreasing by 9.4% YoY, 10.3% YoY & 5.9% YoY respectively
NBS data also shows that China's property sales value in April 2022 fell by 38.8% YoY, declining further from a 17.7% YoY drop in March and the YoY decline in housing starts also worsened to 44.2% in April from a 22.2% decline seen in March while China's infrastructure investment rose 3% YoY in April, down from the 8.8% YoY growth in March. Major steel consumers in the manufacturing sector also saw YoY decline in April, with vehicle production down 43.5%
China's oversupplied steel market could soon see some relief as the downtrend in demand is expected to bottom out in the near term. Improved demand outlook is expected to mostly stem from China's latest move of reducing property loan interest rates by 0.2 points for first-home buyers on 15 May, indicating that the country has shifted from deleveraging to supporting the property sector. Although this move will not reverse the downward trend in property sales or new home starts in the near term, it signals more supportive policies to be introduced to prevent uncontrolled default by cash-strapped developers, which will ease any further squeeze on steel demand.
China Iron and Steel Association’s Deputy Chairwoman Ms Qu Xiuli said “The steel industry is expected to achieve better performance as the overall Chinese economy expands and policy measures ensuring stable growth take better effect. Steel enterprises have adjusted their variety structure following changes in market demand and achieved stable supply prices during the first few months of this year. The industry has also achieved a balance between supply and demand during the first three months, and the profitability of steel enterprises has improved and shown month-on-month growth. The industry will continue promoting steady and sustainable development of industrial chains in the days to come.”