China's Shandong will limit steel production in 22 at the level of 76 million tons

East China's Shandong Province, the country's third-largest steel production center last year, aims to cap crude steel production in 2022 at about 76 million tonnes, slightly lower than last year's 76.49 million tonnes. Wang Xiao, Deputy Director of Shandong Province. "Development of industry and information technology," local media reported on August 12. The goal is in line with the previous commitment to modernize the local steel industry.

This target is also in line with the country's overall commitment made last year to continue reducing its annual crude steel production. In fact, Shandong crude steel production reached 36.5 million tons in the first half of 2022, down 8.75 million tons or 19.3% from last year, according to the National Bureau of Statistics.

Therefore, to meet the provincial government's latest target, the maximum that Shandong steelmakers can produce in this half will be about 39.5 million tonnes of crude steel, Mysteel Global understands.

In addition to limiting crude steel, Shandong will also control coke production within 32 million tons, Wang said, little changed from 31.87 million tons last year.

Mysteel Global notes that other provincial governments have yet to release any concrete data on their annual crude steel production plans.

“It is still difficult to predict whether other provinces will simply ensure that crude steel production remains largely at the level of last year, like Shandong, or whether their production will be reduced,” the Beijing-based analyst commented.

“However, if local governments do not insist that steelmakers reduce their production this year, but simply keep output at or slightly below last year’s level, then it is the demand for steel as a whole that will determine the production of steel mills, because any excess supply will simply reduce their production. fields," he said.

The analyst also noted that China's central government has softened its tone on achieving its economic growth goal by 2022 and is now asking only local governments and industries to "strive for the best possible outcome."

“This indicates that the goal of maintaining economic growth is still there, but the pressure has slightly eased due to real circumstances. will continue to put pressure on steel demand in the near future," he said.