Chinese demand ticks up, UK production collapses: conference

Chinese steel demand will slightly increase this year, Dao Fortune co-chairman Yuan Wenjiong said at the Kallanish Europe Steel Markets conference in Amsterdam on Tuesday.

“Demand in China is better than last year,” he noted. “The government has announced measures to keep production at last year’s levels. My expectation is that demand will increase by 1% on-year, if there are no future restrictions.”

Stanislav Zinchenko, chief executive of Ukraine-based GMK Center, meanwhile, said Ukraine is going to need large tonnages of steel from Europe for future reconstruction after the war. This is because it is producing much less amid hostilities and logistical problems. “From an export country, we became an import one, because of the Russian aggression,” he added.

However, Ukraine has the potential to become a major supplier of direct reduced iron to Europe, to support its decarbonisation process, he added.

In the UK, meanwhile, crude steel production was only 6 million tonnes last year, the lowest since the Great Depression, said UK Steel general director Gareth Stace. “It was at its highest when I was born and has been dropping ever since. We are not going to grow,” he opined.

On the other hand, the UK government seems to think the steel industry is going to pay for decarbonisation, he added. “That will not happen. We are talking about billions to transform the steel industry for lower CO2 emissions and huge amounts of energy supply to replace the blast furnaces.”

Nobody knows when exactly the green transition is going to materialise and how much money it will cost, he observed.  

“The Turkish scrap market is also facing big challenges ahead due to the difficult market situation,” said Gorkem Bolaka, managing director of Galex Steel International. Once China starts increasing scrap-based steel production, its demand for the raw material will grow and this will cause problems for Turkish mills with sourcing sufficient scrap feedstock, he added.

Svetoslav Abrossimov Bulgaria