China produced 57% of global crude steel, turned nearly all into finished steel products that it exported or used in domestic manufacturing and construction. The annual steel report is out.
By Wolf Richter for WOLF STREET.
Global production of crude steel – ingots, semi-finished products (billets, blooms, slabs), and liquid steel for castings – ticked up just 0.5% in the year 2020, to 1,878 million metric tonnes (Mt), according to the World Steel Association’s 2021 World Steel report today. The 0.5% gain came in two slices: China boosted production and gained a chunk of market share; the rest of the world lost production and market share.
Since 1995, there have been only three periods when annual crude steel production fell: The Asian Financial Crisis in 1998 (-2.7%); the Global Financial Crisis in 2009 (-7.8%); and in 2015 (-3.0%), when China made a short-lived effort to get a grip on the money-losing overproduction at its steel makers that are supported and often controlled by various government entities:
But in 2020, China’s crude steel production, despite a large drop during its lockdown early in the year, rose 6.9%, to 1,064 Mt, accounting for 56.7% of world production. In 2017, China had outproduced the rest of the world for the first time.
In the rest of the world without China, production fell by 6.8% to 813 Mt. China has been able to grab market share during each crisis. Over the past 20 years, total crude steel production surged by 120%, and nearly all of that gain went to China:
In all of the largest producing areas, crude steel production plunged in early 2020. But China more than fully recovered a few months later and then blew by its prior production levels. The CIS (the post-Soviet grouping of countries including Russia) also recovered and late in the year outproduced their pre-Pandemic levels. But the US, India, Europe, Japan, and many other regions didn’t get anywhere near fully recovering. They all lost market share to China.
In the US, crude steel production plunged 17.2% to 72.7 Mt. In the USMCA area – the US, Mexico, and Canada – production plunged 15.7% to 100.5 Mt, the lowest in the data going back 25 years, for a share of 5.4% of global production, while China’s share surged to 56.7%. In 2001, China’s market share had for the first time surpassed NAFTA’s market share. The trend couldn’t be clearer:
Of the top five producing countries – China, India, Japan, the US, and Russia – only China increased production in 2020.
China’s production was over 10 times the production of #2, India, and about 15 times the production of #4, the US. The USMCA countries are indicated in red. Production quantities of Mexico and of Canada are hard to see without magnifying glass:
China converts most of its crude steel to finished steel products.
Most of the crude steel China produced in 2020 was converted in China’s factories into higher-value finished steel products. These finished steel products were then either used in construction or by manufacturers (to make products for export or for Chinese consumption) or were exported outright.
While China produced 56.7% of the world’s crude steel, it also produced 56.2% of the world’s finished steel products.
In terms of crude steel, China exported only 51 Mt (4.8% of its production); but it also imported 38 Mt of crude steel, for net exports (exports minus imports) of 13 Mt, just a tiny fraction of the 1,065 Mt of crude steel it produced.
The 15 largest crude steel companies in the world in 2019
Nine of the 15 companies that produced the largest quantity of crude steel in 2020 are Chinese companies, and six of them are owned or controlled by government entities in China.
Nucor, the only US steelmaker on this list, fell to 15th place, from 14th place last year, and from 12th place in 2018:
- China Baowu Steel Group: 115.3 Mt, up from 95.5 Mt in 2019 and from 67.4 Mt in 2018; includes the tonnage of Maanshan Steel and Chongqing Steel – owned by the government of China.
- ArcelorMittal: 78.5 Mt, down from 97.3 Mt in 2019. Includes shares in AM/NS India and China Oriental. Registered in Luxembourg, managed from India.
- Hesteel Group, formerly HBIS Group: 43.8 Mt down from 46.6 Mt – owned by the government of Hebei Province, China. Includes Serbia Iron & Steel d.o.o. Beograd and MAKSTIL A.D. in Macedonia
- Shagang Group China: 41.6 Mt, up from 41.1 Mt in 2019 – privately owned, China.
- Nippon Steel Corporation: 41.6 Mt, down from 51.7 Mt; includes Nippon Stainless Steel Corporation, Sanyo Special Steel, Ovako, and 40% of AM/NS India and 31% USIMINAS – Japan.
- POSCO: 40.6 Mt, down from 43.1 Mt in 2019 – South Korea.
- Anshan Iron and Steel Group, or Ansteel Group 38.2 Mt, down from 39.2 Mt in 2019 – owned by the government of China.
- Jianlong Group: 36.5 Mt up from 31.2 Mt in 2019 – privately owned, China
- Shougang Group: 34 Mt, up from 29.3 Mt in 2019 – owned by the government of Beijing, China.
- Shandong Steel: 31.1 Mt, up from 27.6 Mt in 2019 – owned by the government of Shandong province, China.
- Delong Steel Group: 28.3 Mt, up from 26.8 Mt in 2019– privately owned, China.
- Tata Steel Group: 28.1 Mt, down from 30.1 Mt in 2019 – India.
- Valin Group: 26.8 Mt, up from 24.3 Mt in 2019 – controlled by the Chinese state, with a minority stake being publicly traded.
- JFE Holdings: 24.4 Mt, down from 27.3 Mt – Japan.
- Nucor Corporation: 22.7 Mt, down from 23.1 Mt in 2019 – USA.
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