Throughout the world, the steel industry has been greatly affected recently in 2022, with obvious price fluctuations and increased production demand. Of course, there were many factors during the period, including the three-year epidemic and the Russian-Uzbekistan conflict in Eastern Europe. Let’s have a read at the steel situation in various countries.
Steel Mills Feel High Pressure By Russia-Ukraine War & Epidemic
The increased input costs are squeezing profits and may force secondary factories to temporarily close or reduce production. However, with the price of finished products sold in early March rising, primary factories may want to take advantage of this and maintain their production level.
Since January to March, it is usually the best period for domestic demand, because the weather supports construction. In addition, government infrastructure projects have a deadline before the end of the fiscal year.
Supported by two factors, steel prices will remain high – the soaring price of raw materials and the energy crisis aggravated by the Russian-Uzbekistan war. With the sanctions imposed by the West, most importing countries are looking for alternative procurement destinations, thus exacerbating inflation.
However, if the price is still too high, the downstream industry may retreat to the second tier and wait for price adjustment. Meanwhile, the demand for cars is on the rise. The total output of automobiles in January has increased to 18.61 million, while the output from November to December 2011 was about 1.6 million. The durable consumer goods industry expects that the sales volume in the summer of 2022 will increase by 12-20% compared with that before the COVID-19 virus epidemic.
Increasement Of India Crude Steel, But Steel Effected By Coal Crisis
India coal crisis to steel price
India’s power sector is facing a critical coal inventory level. Those boilers that rely entirely on imported coal have significantly reduced their operations, putting pressure on power plants that rely on domestic coal.
October may be a critical period for Indian steel mills, as coal has become a major problem, although they operated at the best level in September. Some captive plants may have to stop production. With the deepening of the crisis, the government may also have to intervene to reduce production of power-intensive equipment such as electric arc furnaces and induction furnaces in order to transfer electricity to the household sector, taking into account the upcoming festivals.
This is a thorny issue when the industry enters the peak demand season starting from October. The monsoon recedes and construction activities resume in an all-round way, which will stimulate long-term steel consumption. The holiday season usually ensures high demand for durable consumer goods, which in turn will have a positive impact on flat steel. With the rise of production costs, especially due to runaway coal inflation, steel mills raised the price of finished steel.
Increasement of India crude steel output
With the production of JSW steel’s 50,000 t/a Dolvi plant, India’s crude steel output will increase. By the end of the year, the output will gradually increase to the optimal capacity of 5 million tons/year, which means that the output of crude steel will increase by at least 300,000 to 350,000 tons in the future.
NMDC also started production of its coke oven unit at Nagarnar Steel Plant. The plant will also increase some capacity, because it is expected to be put into operation in 2022, and Macon will debug it.
Steel Production In China
In November 2022, China’s steel production fell again, as steel mills cut production to curb losses and cope with declining demand.
The nationwide virus control, the continuous real estate crisis and the start of winter pollution control measures made the steel industry continue to fall behind in November, and the output fell for the second consecutive year. Although the price of iron ore has risen sharply in recent weeks, and expected China to re-open, the recovery of the end use will depend on the government’s stimulus measures and the stability of the real estate market, as well as the elimination of the most serious epidemic of COVID-19 virus infection.
In November, Beijing released two plans to boost the real estate market and relax some virus restrictions, which were later replaced by the faster COVID-19 Virus Free Plan. Both have little impact on the activity data in November, because other economic indicators, from retail sales to industrial output, are deteriorating, and China’s real estate market continues to decline.