According to statistics obtained by CISA, average daily iron production in September decreased by 4% compared to August and by 13% compared to September 2020, while steel production decreased by 6% and 18%, respectively. Although the demand for sheet products has drastically decreased due to the restriction of energy supply to industrial enterprises, about 80% of the cuts fell on the production of long products.
S&P Global Platts states that in October, the situation in electricity supply improved in some provinces, notably Jiangsu, Guangdong and Guanxi, allowing metallurgical companies to start ramping up production. However, metallurgists must ensure that their total output in 2021 does not exceed the 2020 level.
In China's northeastern provinces, seasonal restrictions will apply from November 15 to March 15 to reduce pollution and improve air quality. As a result, steel production in Hebei province, where the strictest requirements will apply in 2021, should decrease by about 22 million tons compared to last year.
Overall, as stated in the China Metallurgical News report, Chinese experts estimate that the national steel production volume in the fourth quarter of this year averaged 77 million tons per month. If this forecast is correct, the decrease compared to October-December 2020 will be 17.4%, or approximately 40 million tons.
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