China crude steel output falls for first time in six years

China crude steel output falls for first time in six years

BEIJING, Jan 17 Reuters -- China's annual crude steel production fell for the first time in six years in 2021, falling from record levels it logged in 2020 as the country steps up efforts to contain emissions in its mammoth ferrous sector.

The world's biggest steel producer produced 1.03 billion tons of crude steel last year, data from the National Bureau of Statistics NBS showed on Monday, a decline of 3% from the 1.065 billion ton output in 2020.

The country vowed to reach its carbon peak by 2030 as Beijing had urged the industry to keep full-year steel production at no more than the previous year's levels to reduce pollutants and greenhouse gas emissions since the beginning of 2021.

In the first six months, China's steel output was nearly 12% higher than in the same period in 2020, as strong downstream demand from the construction and manufacturing sectors boosted profits at mills and made China's steel output nearly 12% higher than the target in the first six months.

Since July when the government tightened environmental controls, steel production has started to contract on an annual and monthly basis. An unexpected power shortage - fuelling raw material prices and a debt crisis in the property market - has slowed demand for the industrial metal.

In the second half of 2021, China made 470.86 million tons of crude steel, a decline of 16% from July-December a year earlier.

According to the NBS data, December's average daily output was 2.78 million tons, a jump of more than 20% from a month earlier.

Analysts think the coming Lunar New Year and Beijing Winter Olympics will continue to weigh on production before consumption picks up after the holidays.

China's steel demand will fall slightly this year and crude steel production will dip around 0.7% from 2021, according to a government consultancy.