Guangxi, Guangdong, and Jiangsu Announced Crude Steel Production Cut Plans for Aug-Dec, Output to Be Sharply Reduced

SHANGHAI, Sep 16 (SMM) – At the end of August, the National Development and Reform Commission issued the "Performance of Energy Consumption Dual Control in Various Regions in H1 2021".  The energy consumption intensity in Qinghai, Ningxia, Guangxi, Guangdong, Fujian, Xinjiang, Yunnan, Shaanxi, and Jiangsu increased in the first half of the year. The energy consumption amount rose in Qinghai, Ningxia, Guangxi, Guangdong, Fujian, Yunnan, Jiangsu, and Hubei.

The total crude steel output from January to July increased significantly year-on-year in the above mentioned regions. Guangxi, Guangdong, and Jiangsu issued notices to implement the dual control of energy consumption, and the total crude steel output in 2021 is stimulated to be no higher than that in 2020.

On the basis of the September production schedule, Guangxi will further reduce its output by 20%. The crude steel output of Wuzhou Yongda Steel, Deyuan, Guifeng Metals, Southwest Special Steel, Guiping Steel and other steel plants in September shall not exceed the 70% of the monthly average output in first half of 2021. At the same time, the power consumption load in September shall not exceed 70% of the average monthly consumption in the first half of 2021. According to the data released by the National Bureau of Statistics, Guangxi’s crude steel output from January to July totalled 22.96 million mt, an increase of 4.29 million mt or 22.95% year on year. The maximum average daily output from August to December will be approximately 77,100 mt, 32,200 mt lower than the average daily output from January to July.

The inspection team of the environmental protection arrived in Guangdong in late August, and the Electric Furnace Plants in Heyuan were greatly affected, some of which were suspended. The crude steel output in from January to July this year increased by 2.91 million mt or 15.88% on the year to 21.18 million mt. The maximum average daily output from August to December will be approximately 84,300 mt, 16,600 mt lower than the average daily output from January to July.

About 64,000 mt of crude steel output is reduced in the daily production in Jiangsu at present. Jiangsu’s crude steel output from January to July totalled 73.77 million mt, an increase of 6.47 million mt year on year. The maximum average daily output from August to December will be approximately 315,400 mt, 35,800 mt lower than the average daily output from January to July.

The China Iron and Steel Association (CISA) reported that major mills in China produced 20.45 million mt of crude steel, 18.17 million mt of pig iron, and 19.34 million mt of steel in the first half of September. Among them, crude steel output averaged 2.04 million mt/day, down 0.38% on the month and 4.29% from the same period a year ago. Average daily production of pig iron fell 0.05% on the month 4.16% on the year to 1.82 million mt, and that of steel dropped 7.61% on the month and 3.28% to 1.97 million mt.

The crude steel inventory in the first half of September was 13.32 million mt, a decrease of 0.77% from the first half of August. It shows that demand is in continuous recovery, and the crude steel reduction policy is gradually taking effect.