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Analysis of China's electrical steel production in the first three quarters of 2018

Category: Industry News Publish Time：2018-11-01

Core Tip: In the first three quarters of this year, China produced about 7.6454 million tons of electrical steel, with non-oriented electrical steel increasing by 1.57% year-on-year and oriented electrical steel increasing by 9.72% year-on-year. In terms of non-oriented electrical steel, in the first three quarters of this year, China produced about 6.7419 million tons of non-oriented electrical steel, including 5.4735 million tons of medium and low grade electrical steel and 84 million tons of high grade electrical steel.

　　In the first three quarters of this year, China produced about 7.6454 million tons of electrical steel, with non-oriented electrical steel increasing by 1.57% year-on-year and oriented electrical steel increasing by 9.72% year-on-year.

　　In terms of non-oriented electrical steel, in the first three quarters of this year, China produced about 6.7419 million tons of non-oriented electrical steel, including 5.4735 million tons of medium and low grade electrical steel, 0.8427 million tons of high grade electrical steel, and 0.4257 million tons of high-efficiency (high magnetic induction) electrical steel.

　　By the end of the third quarter of this year, there were about 21 non-oriented electrical steel producers in China, with a dynamic capacity of 10.82 million tons, a 2.2% increase compared to 2017. Among them, Sichuan Ruizhi, Tianjin Chenta, Huangshi Shanlixing Metallurgy, Zhejiang Xiehe Shouxin, Zhejiang Huaying Special Steel, Huaxi Cold Rolled Strip Steel, Xicheng Iron and Steel, Jiangsu Dalishen, Foshan Jinxi Jinlan, Shunde Posco Steel Plate and other companies have low capacity utilization rates and production is unsaturated; during the same period, Jiangyin Haida was shut down. It is preliminarily judged that this is closely related to market demand, overcapacity of low-end products, and upgrading of downstream products. The seven state-owned enterprises, Baowu, Taiyuan Iron & Steel, Shougang, Ansteel, Maanshan Iron & Steel, Baotou Steel, and Benxi Steel, produced a total of 5.0516 million tons, a 4.48% increase year-on-year, accounting for 74.93% of the national non-oriented electrical steel output from January to September; there are 14 joint ventures, mixed-ownership, collective, and privately-owned enterprises, with a total output of 1.6903 million tons, a decrease of 6.24% year-on-year.

　　From the production in the first three quarters of this year, the output of state-owned enterprises' non-oriented electrical steel has slightly increased compared with the same period of 2017, while the output of joint ventures, mixed-ownership, collective, and privately-owned enterprises has decreased.

Table 1: Regional Distribution of Non-Oriented Electrical Steel Production in China in the First Three Quarters of 2018

Region	Output (10,000 tons)	Number of Enterprises
East China	321.93	9
North China	199.5	4
Northeast China	75.19	2
Central China	43.1	2
South China	28.22	3
Southwest China	6.25	1
Total	674.19	21

　　In terms of oriented electrical steel, in the first three quarters of this year, China produced about 903,500 tons of oriented electrical steel, including 262,200 tons of general oriented electrical steel (CGO) and 641,300 tons of high magnetic induction oriented electrical steel (HiB).

　　By the end of the third quarter of this year, there were about 18 oriented electrical steel producers in China, with a dynamic capacity of 1.555 million tons, a 13.82% increase compared to 2017. Among them, Ansteel and Ningbo Yinye Innovation Materials Co., Ltd. have low capacity utilization rates; Chongqing Wangbian Electric (Group) Co., Ltd., Jiangyin Senhao Metal Technology Co., Ltd., Fujian Jinglong Electric Co., Ltd., and Jiangsu Hubang Transformer Co., Ltd. are newly put into production this year and are currently in the commissioning and production stage; Baowu, Shougang, and Ansteel, three state-owned enterprises, produced a total of 667,100 tons, a slight decrease of 0.1% year-on-year, accounting for 73.84% of the total national oriented electrical steel output; 15 private enterprises produced a total of 236,400 tons, a significant increase of 51.88% year-on-year.

　　From the production in the first three quarters of this year, a clear pattern of high-end and low-end products has emerged. Baowu and Shougang both use low-temperature billet heating technology to produce high magnetic induction oriented electrical steel (HiB), while private enterprises use medium and high-temperature QRD technology to produce general oriented electrical steel (CGO). Compared with the same period of 2017, the output of state-owned enterprises remained basically stable, while the output of private enterprises increased significantly, with a total increase of more than 50%.

Table 2: Regional Distribution of Oriented Electrical Steel Production in China in the First Three Quarters of 2018

Region	Output (10,000 tons)	Number of Enterprises
East China	71.89	13
North China	15.45	2
Southwest China	2.92	2
Northeast China	0.09	1
Total	90.35	18

　　In summary: First, from January to September this year, China's capacity utilization rate of non-oriented electrical steel was 62.31%, and the capacity utilization rate of oriented electrical steel was 58.10%, lower than the reasonable level calculated by international capacity utilization rate; second, from the data, China's electrical steel is in a transition period from high-speed development to high-quality development, mainly manifested in excessive repeated investment in the early stage, new low-end product projects, resulting in increasingly obvious structural overcapacity, coupled with the impact of raw material supply and production costs on private enterprises, the phenomenon of production suspension is more frequent, and due to the energy efficiency upgrading and technological progress of downstream industries, the demand for low-end electrical steel has begun to decrease; third, from January to September this year, the market price trend has been basically stable or fluctuated, striving to return to a reasonable price range; fourth, it is predicted that new demand for electrical steel will emerge in the fourth quarter or 2019, especially with the increasing recognition of the "Belt and Road" initiative, energy efficiency upgrades in the transformer industry, variable frequency household appliances, and intelligent high-efficiency motors, all of which have put forward new demands for electrical steel.

Keywords: Analysis of China's electrical steel production in the first three quarters of 2018

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