SHANGHAI, Jun 21 (SMM) — This is a roundup of news in the steel industry for last week.
China's automobile output and sales dropped 8.7% and 5.5% MoM, fell 6.8% and 3.1% YoY
China's automobile production and sales were 2.04 million units and 2.13 million units, down 8.7% and 5.5% month on month respectively, and falling 6.8% and 3.1% year on year. The output and sales totalled 10.63 million units and 10.88 million units from January to May, up 36.4% and 36.6% on the year. The increase narrowed 17 percentage points and 15.2 percentage points respectively compared with the growth from January to April.
Chen Shihua, deputy secretary-general of the China Association of Automobile Manufacturers (CAAM), stated that the shortage of chips was one of the important reasons that led to the decline in automobile production and sales in May. The current passenger car inventory is only 509,000 units, far lower than the normal level at around 1 million units. The chip shortage intensified in April and May, so the car supply may remain tight in June.
Measures to support the stable operation of foreign trade companies amid rising commodity prices
The Ministry of Commerce has conducted extensive and in-depth researches on 7,500 foreign trade companies, and have taken some measures to promote import diversification and build stable trading channels for bulk commodities. On the basis of consolidating and enhancing the policy effects of export credit insurance and credit support, the Ministry of Commerce will continue to track the price trends of bulk commodities and the production and operation of foreign trade enterprises, further optimise and improve the trade policy toolbox, and help foreign trade enterprises, especially small and medium-sized companies, to reduce costs, expand markets, and maintain stable operations.
Domestic demand for crude steel still has upward room
The National Development and Reform Commission stated that the domestic demand for crude steel is expected to rise further in the coming period, especially before the end of the 14th Five-Year Plan. It will strictly prohibit new production capacity, promote the green and low-carbon development of the steel industry, facilitate the merger and reorganisation of the iron and steel industry, keep enterprises as main bodies, adhere to government guidance and market-oriented operations, encourage the optimisation of the industry layout, and improve the quality and level of the development of the iron and steel industry.
The NDRC will also encourage iron and steel enterprises to accelerate the green and intelligent transformation, improve the overall energy-saving and environmental protection by promoting the development of EAF technology, advance the construction and expansion of domestic iron ore projects to enhance effective supply capacity, and further strengthen the cooperation in the upstream and downstream industrial chains to create a good market environment.
China to crack down on abnormal transactions and speculations
The Price Department of the National Development and Reform Commission and the Price Supervision and Anti Unfair Competition Bureau of the State Administration for Market Supervision jointly visited the National Coal Trading Centre to investigate the operation of the coal market and price changes, and held a symposium to study how to ensure the supply and price stability of coal and other commodities.
Prices of coal and other commodities had risen rapidly sine 2020, with pricing of some products reaching record highs, which increased the burden on downstream industries and exerted an adverse impact on the healthy development of the real economy. The NDRC will closely monitor the price trends of coal, provide price forecast and early warning, timely understand the operation of relevant market entities, investigate abnormal transactions and malicious speculation, and severely crack down on illegal activities such as cornering and price pushing, in order to maintain a normal market order. At the same time, it will standardise the compilation and release of the commodity price indexes in accordance with the newly introduced "Management Measures for the Price Index of Important Commodities and Services” for trial implementation.
Steel mills in production in Hebei reduced from 107 to 68
Hebei has been successful in eliminating excess capacity during the 13th Five-Year Plan period in the key industries of steel, coal, cement, flat glass, coke and thermal power. The number of steel mills in production had been reduced from 107 to 68, with the production capacity cut from 320 million mt to below 200 million. A total of 150,700 employees had been repositioned, with the replacement rate at 100%.