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China to set new record for steel production despite pandemic - Baowu Steel Group

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Growing demand from the construction sector and government support for domestic consumption will lead to a record increase in annual steel production in China above one billion tons.

China to set new record for steel production despite pandemic - Baowu Steel Group

The further development of car production in China, especially cars on new energy sources, will be one of the main directions of the 14th five-year plan, covering 2021-2025, which will lead to an increase in demand for high-strength and ultra-high-strength steel grades, as well as for non-oriented electrical engineering steel in the next five years. Representatives of the largest metallurgical company of the People's Republic of China (PRC) Baowu Steel Group announced this at a press conference in Shanghai on 28 August.

The company also expects to benefit from the development of such high-tech manufacturing sectors as transmission and conversion of ultra-high voltage power, green energy, rail transport and the chemical industry.

Baowu Steel Group marks a recovery in demand in the second half of the year, pushing crude steel production in China up 4% year-on-year in 2020 to a record 1.04 billion tonnes.

The company expects long steel prices to be well supported in the second half of the year, while the third quarter is likely to be the strongest quarter in 2020 for the flat steel market.

Baowu Steel said China's steel industry remains fragmented and overcapacity persists, adding that the company will continue to pursue its M&A strategy.

On August 21, Baowu signed an agreement to acquire 51% of the large stainless steel producer Taiyuan Iron & Steel, or TISCO, for a value of 14.5 billion yuan ($ 2.1 billion), bringing the total steel production capacity to 111 million tons per year from about 98.5 million tons today.

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