Rebounded steel offers more opportunities for the republic’s shipyards
The republic’s steel curbing policies forced a halt in China’s building industry. However, on the other side of the country was stellar performance in newbuildings. Its latest steel rebound bodes well for shipyards.
Indirect incentive for ship builders
Despite prior grim news on steel output in China due to carbon emission-related policies, China’s maritime industry did not suffer any punctures. Instead, the industry watched as the republic showed off its net zero ambitions by developing ammonia powered vessels. Its proposals received in principle (AIP) from the Chinese Ship Classification Association, as well as the American Bureau of Shipping.
China’s rebounding steel production did bring some relief to affected sectors. Platts reported the republic’s steel output rebounded on a monthly basis for the first time in November. It expected this upward trend to continue in December and beyond as steelmakers ramp up after completing 2021 output cut requirements in November, and noticed an improvement in margins.
The measures to cushion impacts from unstable steel prices were for construction and infrastructure sectors. Industry sources disclosed expectations of additional monetary easing and supportive policies in the property and infrastructure sectors in 2022 were boosting sentiment for steel demand. These would help offset the rise in supply.
China’s National Bureau of Statistics’ (NBS) data as at 15 December 2021 revealed the country’s pig iron and crude steel output in November rebounded by 0.1 per cent and 1.2 per cent from October levels, to 2.06 million mt/day and 2.31 million mt/day respectively. However, on a year-on-year basis, the November pig iron and crude steel output were still 16.6 per cent and 22 per cent lower at 61.73 million mt and 69.31 million mt. From January-November, China’s crude steel output reached 946.36 million mt, down 2.6 per cent, or 25.26 million mt according to NBS. Pig iron output over the same period dropped 4.2 per cent on the year to 796.23 million mt.
Clearly, the republic has no intention to expose its shipbuilding to any risks given it has begun investing in net zero goals. Market sources remained hopeful that the healthy margins would incentivise higher steel production. That is an open invitation for shipyards to push their shipbuilding envelopes.
Marine Online News Team
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