China to cut steel production until at least March 2022?

September 7, 2021 – According to the latest reports, China will cut steel production until at least March 2022. It is worth noting that this time the order will be issued at national Chinese level rather than the traditional local level. EU steel prices for automakers to double in 2022. And the lie of green gas – where will the millions of tons of hydrogen come from by 2030?

China likely to cut steel production by March 2022

China intends to reduce steel production until at least March 2022, according to Chinese media reports. Primarily affected by this is the Beijing-Tianjin-Hebei steelmaking belt.

The aim is to achieve the targets set out in the current 5-year plan and the traditional production cuts in the hot summer months. The concurrent Winter Olympics are also expected to benefit.

What is remarkable about the current announcement is that it was made on a national level, not a local one. And that it is explicitly aimed at the steel industry. Which, according to analyses, has not been the case from 2016 to 2020.

Chinese steel exports down almost 11% in August

According to reports from the China Iron and Steel Association (CISA), Chinese steel exports fell by almost 11% in August compared to the previous month.

EU automotive steel prices doubled for 2022?

Negotiations between auto manufacturers and steel producers are in full swing. Steel prices for vehicle manufacturers are expected to double.

EU steel market suffers extreme shortage despite lower auto production

In 2021, due to bottlenecks in semiconductor production, carmakers did not take some call-off volumes in hot-dipped galvanized steel, which are currently being greedily absorbed by the market, which has been suffering from a shortage of materials since the beginning of 2021.

Taiwan has announced relief for semiconductor shortage

For 2022, Taiwanese semiconductor manufacturers have announced that they will significantly increase the production of chips and thus provide relief for the tight automotive market. As a result, carmakers, as important European steel customers, should be able to produce at full capacity again for the foreseeable future.

Analysts desperately seeking direction on the steel market

Market-leading analysts are currently desperately searching for a new direction for the development of steel prices on the European markets. The smallest changes, such as a marginal increase in German steel inventories triggered by “quieter” summer months, are being taken out of context.

Looking at previous years, new car registrations also tended to decline in August. In 2020, it was down 28.8% on 2019. In 2021, it was down just 23% on 2020. Automakers also saw their biggest order declines in August in 2018 and 2019.

Hydrogen – The lie of green gas

The EU strategy to a CO2 reduction of 55% by 2030 or CO2 neutrality by 2050 is currently based on wishful thinking or seems to be currently simply a lie. There is currently no significant production of green hydrogen in the European Union because, among other reasons, there is not enough alternative energy, e.g. from solar energy or wind power. Just one million tons of hydrogen are expected to be available in the EU by 2024.

Lobbying: Hydrogen or rather natural gas?

According to independent media reports, it is clear that the natural gas producers have taken the lead in lobbying and are regular visitors, for example, to the German Federal Minister of Economics, Peter Altmaier. This has raised some exciting questions regarding green hydrogen, which we will explore shortly.

Stainless Espresso: China to cut steel production until at least March 2022?