China’s steelmakers aim for an excellent start to the New Year, although some companies have faced lower profitability due to higher raw material prices and lower finished product steel prices. As well as carrying out repairs to a few factories as part of the annual plans.
S&P Global reports that blast furnaces are operating as usual at total capacity across the country and have no short-term plans to shut down production, with production improving significantly compared to the end of 2022, although still down.
Barring any COVID-related disruptions, some market participants expect an increase in domestic demand for steel amid economic stimulus policies.
However, demand could be affected by the slowdown in activity in most construction sites in China due to labour shortages and investment problems in the construction industry. These factors will likely influence the number of projects that will be launched.
In 2022, the profits of Chinese steel companies decreased by 91.3% compared to 2021 to 36.55 billion Yuan ($5.4 billion).
Steel consumption in China in 2022 decreased by 3.3%, or by 31 million tonnes, compared to 2021, reaching 914 million tonnes, and by 8.3% compared to 2020, equivalent to 83 million tonnes.