When the epidemic swept the world, due to the high degree of globalization of the steel industry, closely linked with the development of the world economy, the global steel industry suffered heavy losses, and the global steel output hit the biggest drop since the outbreak of the financial crisis.
According to analysis by the World Steel Association, global steel production fell 11 percent to 68 million tons during the pandemic, the biggest drop since 2009. Among steel producing regions outside China, the European Union led the decline with a 20 per cent drop, followed by India, Japan, South Korea and the US.
China, the world’s largest steel producer, produced 928.3 million tons of steel in 2019, up 6.6 percent year on year and accounting for 51.33 percent of global steel output, according to the International Iron and Steel Institute. In the first quarter of this year, China’s crude steel output was 234.45 million tons, up 1.2% year on year, cISA said. Steel production of 267.42 million tons, although by real estate, infrastructure construction, automotive and other industries demand decline, inventory has increased, but in the middle of March, with the release of downstream demand, smooth logistics, inventory began to decline, China’s steel industry gradually turn better.
On April 21, BHP Billiton, the world’s leading mining company, said in an evaluation report that China’s production activity is heating up after being encouraged by fiscal stimulus policies. Utilization rate of blast furnaces rose to nearly 79% in April, compared with 73% in the same period last year. Steel bar demand is also flat or above normal levels for the same period.
At the same time, China is also the main material, the largest consumer of iron ore, steel products demand for iron ore accounted for about 60% of the world’s iron ore consumption, the huge demand for supporting the part of the country’s iron ore industry, for example, Brazil in the first two months of the year, exported 30.623 million tons of iron ore to China, occupying 63% of its total exports; Australia’s iron ore exports to China totaled 127 million tons in the first quarter of this year, up 7.4 percent year on year, with 85 percent of iron ore exports from the country’s largest port destined for the Chinese market.
BHP billiton reported that seaborne iron ore prices remained above $80 a metric ton amid a broad slump in commodity markets. That price has helped mining giants such as BHP Billiton continue to extract iron ore from the ground at a cost of $13 – $14 a tonne.
At the same time, analysts say the steel market is highly unbalanced and heavily dependent on China. Under the epidemic, except for China, a large number of countries and regions of steel production, which makes the current situation of China’s unique more prominent.
