China's 2022 crude steel output falls for second straight year

China's crude steel output in 2022 fell by 2.1%, or 21.73 million mt, from 2021 to 1.013 billion mt, marking a second-successive annual decline, data from the National Bureau of Statistics showed Jan. 17.

Some mill sources said China would continue to contain its steel production growth in 2023, which would lend support to the steel market as demand is unlikely to improve substantially in 2023.

China's crude steel output in December fell 9.8% on the year to 77.89 million mt. On a daily basis, crude steel production increased by 1.1% on the month, to 2.513 million mt, according to S&P Global Commodity Insights calculations.

In December, China's pig iron production fell by 4.6% on the year to 69 million mt. Daily pig iron output also fell 1.8% on the month to 2.226 million mt.

In 2022, pig iron output decreased 0.8%, or 6.97 million mt, on the year to 863.83 million mt.

Some market participants expected China's crude steel output to continue trending downwards in January-February, mostly due to off-season factors.

Some of the sources said steel output could rebound in late-February to March. However, recovery in steel demand this spring is likely to be modest and should add pressure on steel prices by the time, they added.

China's floor space of new home construction starts in December fell by 44.3% on the year, according to NBS data. In 2022, the new home construction starts, the most important steel demand driver in China, dropped by 39.4% on the year.

The year-on-year growth in China's infrastructure investments reached 14.3% in December. The total infrastructure investments in 2022 increased by 9.4% on the year.

Most sources S&P Global spoke to expected China's infrastructure construction would maintain current growth rates for much of 2023. But they added that the momentum generated by the infrastructure sector would still be insufficient to offset the headwinds faced by the property sector.