Data from the National Bureau of Statistics showed that China’s crude steel production in 2022 decreased by 2.1%, or 21.73 million tonnes, compared to 2021, to reach 1.013 billion tonnes in the second consecutive annual decline.
Some sources said that China would continue to reduce steel production in 2023, which will provide support to steel markets as demand is unlikely to improve significantly in 2023.
China’s crude steel production fell 9.8% year-on-year to 77.89 million tonnes in December.
In December, China’s cast iron production fell 4.6% year-on-year to reach 69 million tonnes.
In 2022, cast iron production decreased by 0.8% or 6.97 million tonnes over the year to reach 863.83 million tonnes.
Some market participants expected China’s crude steel production to continue the downward trend in January-February, mostly due to off-season factors.
Some sources said that steel production may rebound in late February and March, adding that the recovery in steel demand this spring is likely to be modest and will add pressure on steel prices.
The floor area for new home construction in China in December fell by 44.3% year on year, according to NBS data. In 2022, new home construction began, the most important driver of steel demand in China, down by 39.4% over the year.
The annual growth in China’s infrastructure investment reached 14.3% in December, and the total infrastructure investment rose 9.4% year on year in 2022.
Most sources predicted that infrastructure construction in China would maintain current growth rates for much of 2023. Nevertheless, they added that the momentum generated by the infrastructure sector would still be insufficient to offset the headwinds faced by the real estate sector.