“China to proceed with steel industry restructuring… No big hit expected to Korean companies”
Yang Ji Yun | galileo@ | 2017-05-22 10:48:50
[Digital Times, Yang Ji-yoon] An analysis is now underway to determine whether the Chinese steel industry has been restructured since last year as China`s crude steel output has recorded an all-time high in April. It is also expected that the Korean steel industry will be hit. However, this figure is a statistical count only, and there is no increase in actual production, and restructuring of the Chinese steel industry is expected to continue for the time being.
According to the steel industry on May 21, China`s crude steel production in April reached 72.78 million tons, up 5% from the same month last year. This is an increase of 780 thousand tons (1%) from 72 million tons of production in March, which was the monthly maximum. Cumulative crude steel production from January to April also rose 5% from the previous year to 274 million tons. It is estimated that the Chinese government has completed the restructuring of the steel industry in the market and steel industry.
It is argued that the numerical increase is difficult to accept at face value in the related industry. It seems that small Chinese firms that have not been caught up in the statistics have been forced out due to restructuring, and that the volume of production they have produced has shifted to government licensees and production. It means that China`s crude steel production has not increased.
China`s small-scale steelmakers have been producing steel products by melting blast furnaces, and have not been caught in statistics as they are not licensed by the Chinese government.
Chinese small steel makers` annual crude steel production is 30 ~ 50 million tons according to the POSCO Management Research Institute. Experts believe that a large part of China`s Prime Minister Lee Keqiang announced on May 10 that it had closed 31.7 million tons of steel facilities in the period of January-April.
Shim Sang-hyung, a senior researcher at the POSCO Research Institute, stated, "It seems that normal companies have filled vacancies and the output has been reflected in the statistics as the so-called `shadow` products disappear.” He also added, “I think steel industry restricting of Chinese government will continue.” The United States and the European Union (EU) are still putting pressure on it, and it is difficult for China to produce and export steel products like in the past.
On the contrary, Korean steelmakers such as POSCO and Hyundai Steel seem to have removed some of the market uncertainties due to the withdrawal of small-scale Chinese companies. A steel industry expert said, "Korean steelmakers are geographically close to China and are vulnerable to volatility in the local market. Therefore, we need to differentiate our technology and expand our production of high value-added products."
By Yang Ji Yun galileo@
[ copyright ⓒ The Digitaltimes ]
According to the steel industry on May 21, China`s crude steel production in April reached 72.78 million tons, up 5% from the same month last year. This is an increase of 780 thousand tons (1%) from 72 million tons of production in March, which was the monthly maximum. Cumulative crude steel production from January to April also rose 5% from the previous year to 274 million tons. It is estimated that the Chinese government has completed the restructuring of the steel industry in the market and steel industry.
It is argued that the numerical increase is difficult to accept at face value in the related industry. It seems that small Chinese firms that have not been caught up in the statistics have been forced out due to restructuring, and that the volume of production they have produced has shifted to government licensees and production. It means that China`s crude steel production has not increased.
China`s small-scale steelmakers have been producing steel products by melting blast furnaces, and have not been caught in statistics as they are not licensed by the Chinese government.
Chinese small steel makers` annual crude steel production is 30 ~ 50 million tons according to the POSCO Management Research Institute. Experts believe that a large part of China`s Prime Minister Lee Keqiang announced on May 10 that it had closed 31.7 million tons of steel facilities in the period of January-April.
Shim Sang-hyung, a senior researcher at the POSCO Research Institute, stated, "It seems that normal companies have filled vacancies and the output has been reflected in the statistics as the so-called `shadow` products disappear.” He also added, “I think steel industry restricting of Chinese government will continue.” The United States and the European Union (EU) are still putting pressure on it, and it is difficult for China to produce and export steel products like in the past.
On the contrary, Korean steelmakers such as POSCO and Hyundai Steel seem to have removed some of the market uncertainties due to the withdrawal of small-scale Chinese companies. A steel industry expert said, "Korean steelmakers are geographically close to China and are vulnerable to volatility in the local market. Therefore, we need to differentiate our technology and expand our production of high value-added products."
By Yang Ji Yun galileo@