China dominates steel industry amid the Coronavirus pandemic
The Coronavirus pandemic has put China on a path to controlling global steel production to a greater extent than before, which speeds up the trend of control that accelerated its pace more than twenty years ago.
Last May, China produced 62% of the world’s steel production, a rate that no other country had reached, and much higher than its 54% production rate last year.
In 1996, China was able to surpass the rest of the countries by producing 44 million tons, and since then, China has managed to overcome all global economic crises, as China’s share of global steel production increased dramatically to 47% in 2009 from 38% in 2008, and the recent rise is a sign of China’s determination to avoid the impact of global economic weakness.
At a time when steel plant production declined in Europe, the United States and India, Chinese steel production companies continued their work during the Coronavirus pandemic crisis and were producing at a faster rate than it was last year.
The surge in Chinese steel production has been a boon for Australian BHP Mining Companies, Fortisky Group, Metals and Rio Tinto Cloc, which are the main suppliers of iron ore, the main component of steel. Shares of the three companies have risen by at least 50% since last March.
As factories scramble for supplies, the price of iron ore has risen 20% over the past month to more than $ 105 a tonne.
The stocks of steel industry goods in major Chinese ports have decreased steadily this year to their lowest levels since 2016, which means higher demand from steel companies.
since 2016, which means higher demand from steel companies.
In June, steel imports in China exceeded 1.9 million tons to reach the highest level in ten years, up 46.8% month-on-month and up by 99.9% year-on-year, raising China’s total steel imports in the first half to 5.8 million tonnes, an increase of 26.1% on an annual basis.
From January to June this year, iron ore imports in China increased 9.6% year on year, reaching 546.907 million tons.
China’s steel exports reached an eight-year low in June at 3.7 million tonnes. China’s total exports during the January-June period reached 34.4 million tons, down 16.5% year-on-year.
As the demand for steel witnessed a decline like the rest of the world, amid the spread of the Coronavirus and a decline in exports, with the recovery of demand in China after the virus receded in the recent period.
More than 70% of car producers in Europe, Japan and South Korea have also been suspended due to the Coronavirus pandemic as well as major buyers of flat steel in China.
Meanwhile, global crude steel production outside of China decreased 7% month over month in April.
Most of the steel production regions are expected to witness a decline in crude steel production due to the decline in production amid the prolonged shutdown, as its production in India decreased by 65%, while in Japan it decreased by about 20% and production in Europe decreased by 11%.
However, China is expected to move faster towards normalizing economic activity as it was the first country to emerge from the Coronavirus crisis and dominate the global iron and steel market.
Dr. Kamel Djoudi