With the upcoming Olympic Winter Games, various versions of production restrictions in north China during Olympic Winter Games were rumoring in the whole country. But one thing can be determined that the production restriction is a certainty. And the specific impact as follows:

Date Source: Date Center of SteelHome

According to SteelHome, at present, there are 23 steel enterprises in Tangshan (3 of them are merged to count together). The total number of blast furnace is 90 and the quantity of blast furnaces under maintenance during February and March is up to 36, which accounts for 40% of all blast furnaces; The volume of blast furnaces under maintenance is increased to 41806m3 and the output of pig iron reduced is up to 118.9 thousand tons/day, up 49.7 thousand tons/day compared with current maintenance numbers. Now Class A enterprises have 5, newly added 3, and the newly added enterprises are also limited to maintenance during that period of time.

The environmental protection control in Tangshan city has been significantly stricter since 2021. From Huang Runqiu, the minister of Ministry of Ecology and Environment, who checked the implementation of emergency emission reduction measures of steel enterprises on the spot in Tangshan city, the rate of production restriction in the local steel enterprises is up to 20-30% in the full year, and some even exceed this rate for a long time. According to China National Bureau of Statistics, from January-December, the output of Chinese crude steel, pig iron and finished steel products is 1032.79 million tons, 868.57 million tons and 1336.67 million tons respectively, down 3%, 4.3% and up 0.6% respectively year-on-year. In Hebei region, the output of crude steel in the whole year is 224.96 million tons, down 24.805 million tons compared with last year, down 9.9% year-on-year. The production restriction in Tangshan is crucial.

In the year of 2021, the prices for various kinds of steel products hit a record high, which was beyond one’s imagination, and the outputs of strip steel and hot-rolled coil produced by steel enterprises in Tangshan city were also important in the whole country. From the middle of the year of 2021, the spread between rebar and hot-rolled coil, strip steel was from maximum 790 yuan/ton and 460 yuan/ton respectively shrunk to current 380 yuan/ton and 150 yuan/ton respectively. It also can be seen that the sudden concentrated maintenance had a great impact on hot-rolled coil and strip steel. As a result, domestic and foreign steel enterprises found business opportunities of hot-rolled coil and strip steel. Northeast China, Shanxi and more areas put hot-rolled coil and strip steel production line into production one after another, which made up for short-term shortage of market supply.

At present, customers from industrial chains experienced two rounds of sharply adjustments in the year of 2021, and their confidences were frustrated, so there was little attraction for them to store up goods in winter. In macro aspect, good news about steady growth were heard frequently. The plenary meeting of the State Council required to give higher priority to stabilizing economic growth and greatly implement the macro policies. The People's Bank of China said, the current policy called for sufficient, precise and proactive actions; the National Development and Reform Commission said, policies which were beneficial to economic stability should be promoted actively, and policies which would cause economic contraction should be introduced with caution. From the perspective of steel industry, recently, major projects have started working in various regions, special bonds have been issued expeditiously, and the progress of cumulative inventories of steel products is rather slower than that of last year. According to surveys above, the production is beneficial to the market after Chinese New Year. Wish all steel traders a smooth winter storage, and have a healthy, fluent market after Chinese New Year!