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Will crude steel production recover in 2022?

Time : 2022-01-17 Hits : 2022-01-17

In 2021, under the linkage constraints of a number of policies and measures, such as reducing steel output, dual control of energy consumption, peak-staggered production of Beijing-Tianjin-Hebei steel, and production restrictions in autumn and winter, the crude steel reduction task goal was finally completed. So, will crude steel production rise or continue to decline in 2022?

According to data from the National Bureau of Statistics, from January to November 2021, the cumulative output of pig iron in China was 796.23 million tons, a year-on-year decrease of 4.2%; the cumulative output of crude steel was 946.359 million tons, a year-on-year decrease of 2.6%; the cumulative output of steel was 1,223.33 million tons, a year-on-year increase of 1.0%. %. It is estimated that China's crude steel output in 2021 will be about 1.03 billion tons, a year-on-year decrease of about 3%, which is the second negative growth since 2015.

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After entering 2022, except for some areas in Hebei, Shandong, Shanxi and Henan in the 2+26 area that have production curb requirements, there are basically no restrictions on relevant policies in other areas. At the same time, at the 2022 work conference held by the Ministry of Industry and Information Technology at the end of 2021, there was no mention of the control policy for steel production in 2022. However, it is emphasized that it is necessary to continue to consolidate the results of double control of production capacity and output, strictly prohibit new production capacity, strictly replace production capacity, and carry out staggered production in an orderly manner in Beijing-Tianjin-Hebei and surrounding areas. It can be seen that the policy of reducing production has not been fully liberalized.

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From the current point of view, affected by the upcoming Winter Olympics in the first quarter, steel mills in the Beijing-Tianjin-Hebei region will implement production restrictions before March 15. According to the calculation of Lange Steel Research Center, from the beginning of the year to March 15, the crude steel output in the surrounding provinces and cities of Beijing, Tianjin and Hebei will decrease by 27.95 million tons, an average monthly decrease of 11.18 million tons, and an average daily decrease of 370,000 tons. Therefore, the steel output in the first quarter will decrease. It will increase month-on-month, but still show a downward trend year-on-year.

In terms of steel prices, in January and February, due to weak demand and holiday factors, the market is likely to fluctuate weakly. In March, with the gradual development of key projects and the end of the epidemic in various places, the release of demand may lead to a rebound in the market.

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