Ministry of Industry and Information Technology: Five Major Operating Conditions of the Steel Industry in 2021

In 2021, the steel industry will continue to deepen the supply side structural reform, further consolidate the achievements of steel production capacity reduction, promote the green and low-carbon transformation of the industry, actively respond to changes in domestic and foreign demand situations, actively ensure supply and stable prices, and maintain the safety and stability of the industrial chain supply chain. The overall operating situation of the industry is good, laying a good foundation for the high-quality development of the industry.

Firstly, the crude steel production was high in the front and low in the back, achieving a cumulative year-on-year decrease. In the first half of the year, driven by domestic and foreign demand, the country's cumulative crude steel production reached 563 million tons, a year-on-year increase of 11.80%, setting a new historical high for the same period. In the second half of the year, with the implementation of national regulatory policies, the rapid growth of steel production has been effectively curbed. Since July, crude steel production has maintained a year-on-year decline for six consecutive months. The cumulative crude steel production for the year was 1.033 billion tons, a year-on-year decrease of about 32 million tons, a decrease of 3.0%. The cumulative apparent consumption of crude steel is about 992 million tons, a year-on-year decrease of 5.3%.

Secondly, iron ore prices continued to rise in the first half of the year and fluctuated and fell back in the second half. The price of imported iron ore increased significantly in the first half of the year, reaching a historical high of $230.59 per ton on May 12th, greatly deviating from the supply and demand fundamentals and seriously affecting the stable operation of the steel industry. In the second half of the year, with the decrease in steel production leading to a decrease in demand for iron ore, iron ore prices have significantly declined. The cumulative import of iron ore for the year was 1.12 billion tons, a year-on-year decrease of 3.9%, with an average price of 164 US dollars per ton, a year-on-year increase of 55.3%.

The third is the upward fluctuation of steel prices, with a high correction starting in the fourth quarter. Since the beginning of this year, due to the significant increase in prices of raw materials such as iron ore and coking coal, steel prices have continued to rise in the first half of the year. In mid May, the comprehensive price index of domestic steel reached 174.81 points, setting a new historical high. Subsequently, steel prices rebounded from high levels, especially since the fourth quarter, due to the impact of reduced demand and other factors, steel prices have significantly declined. By the end of 2021, the domestic steel comprehensive price index had reached 131.70 points, a decrease of 24.7% from its highest point in 2021. The annual average index was 142.03 points, a year-on-year increase of 36.46 points.

Fourthly, the total export volume of steel is higher than last year, and it has decreased month by month in the second half of the year. Affected by factors such as the rapid recovery of foreign demand and the significant increase in international steel prices, China's steel exports rebounded significantly in 2021 after five consecutive years of decline. In the first half of the year, steel exports continued to grow, with China exporting a total of 37.38 million tons of steel, a year-on-year increase of 30.2%; Accumulated imports of 7.35 million tons of steel, a year-on-year increase of 0.1%. With the effectiveness of policies such as canceling export tax refunds, steel exports have continued to decline month on month since July. The cumulative export of steel throughout the year was 66.9 million tons, a year-on-year increase of 24.6%; The cumulative import of steel reached 14.27 million tons, a year-on-year decrease of 29.5%.

Fifth, the sales profit margin has significantly improved, and the industry efficiency has reached a historic high. Affected by factors such as the overall improvement of the national economy and the rise in global commodity prices, the efficiency of the steel industry showed a trend of high in the first place and low in the second place in 2021, with the steel industry achieving its highest efficiency in history. The cumulative operating revenue of key large and medium-sized steel enterprises throughout the year was 6.93 trillion yuan, a year-on-year increase of 32.7%; Accumulated total profit of 352.4 billion yuan, a year-on-year increase