Steel News Roundup (Nov 15 )

SHANGHAI, Nov 15 (SMM) - This is a roundup of news in the steel industry for last week.

Development and Reform Commission: Coal production hits a high level of 11.93 million mt, and the overall increase in supply and storage provides strong support for a reasonable range of coal prices

According to the National Development and Reform Commission, with the increase in approved coal mine capacity , the gradual commissioning of upgraded coal mines, and the resumed production of temporarily shut down coal mines, coal output has continued to increase since October. The average daily coal output from November 1 to 5 reached 11.66 million mt, an increase of more than 1.2 million mt from the end of September. And the highest daily output reached 11.93 million mt, a record high in recent years. With the increase in national coal production and supply as well as the increase in coal stocks at power plants and ports, the spot prices of thermal coal futures have fallen sharply. Going forward, coal prices are expected to continue to decline steadily as coal production capacity is further released and coal production continues to increase, coupled with the reduction in power plant market purchases after the fulfilment of mid and long-term contracts for thermal coal and the increase in coal storage.

Shandong has reduced coal production capacity by more than 28 million mt in three years

The Shandong Provincial Government held a press conference a few days ago and stated that since 2018, the province has treated more than 110,000 pollution-generating enterprises, and reduced the number of chemical parks from 199 to 84. It has also reduced 12.28 million mt of steel production capacity, 15.06 million mt of coking capacity, and 28.07 million mt of coal production capacity.

The provincial government also issued the New Round of "Four Reductions and Four Increases" Three-year Action Plan (2021-2023) in Shandong Province. The plan stated that in the next three years, Shandong will eliminate 13 industries with low efficiency and outdated production capacity from the current 8 industries. By 2023, Shandong's total fossil energy consumption will be controlled within 396 million mt of standard coal, and the total non-fossil energy consumption will reach more than 44 million mt of standard coal; the total coal consumption will be reduced by more than 6%, and the proportion of coal consumption will dropped by 5 percentage points.

Many steel mills in Shanxi take the initiative to reduce production and conducted overhaul

According to SMM research, due to the sharp drop in the prices of finished products, steel mills in Shanxi reported that their production profits were currently  -300 - -500 yuan/mt, and the enthusiasm for production has dropped significantly. In addition, some steel mills in Shanxi have recently stopped production for maintenance. At present, 8 steel mills have started maintenance, which affects 32,000 mt of pig iron output and 22,000 mt of finished products output every day. Steel mills that are still producing normally said that if the prices of finished products continue to fall and their profits shrink further, they will consider overhauling the blast furnace or rolling lines.

China Baowu Steel signed procurement agreements with 10 global partners at the 4th CIIE

During the 4th CIIE, China Baowu Steel held a theme event - Creating a Green New Future and Building a High-Quality Steel Ecosphere - at the Shanghai National Convention and Exhibition Center. The event consisted of a signing ceremony for centralized procurement and an international forum for green and low-carbon development of iron and steel metallurgy. It is understood that this centralized contract signing specifically involves the procurement of intelligent equipment, materials and spare parts of various subsidiaries of Baowu Steel, as well as the procurement of mineral resources in the Belt and Road projects such as green metallurgy and smart manufacturing projects, iron ore and manganese ore. Th procurement of products and services includes important equipment, key processes and control systems required by the key production lines of the main steel processes. Baowu Steel will continue to build an open and shared cooperation system, and deeply promote the practice of green and low-carbon innovation.