About: Jack Otai

Due to the increasing electricity load, there has been a “wave of electricity curtailment” in many places across the country recently.

In the past few weeks, the Zhejiang Provincial Energy Bureau issued a power-saving proposal. It is advocating that enterprises in the province use electricity off-peak. The city’s electricity supply and demand situation are tense this summer. We advocate industrial enterprises stagger and avoid peak power supply through planned maintenance and other methods. And actively support the relief of power supply pressure during peak hours. “Let electricity be used by the people” became hot words.

The “power curtailment wave” has had a considerable impact on the production of industrial enterprises in many places, and the steel industry is no exception. This makes many market participants worry about whether it will cause an imbalance between supply and demand. It will affect the stable operation of the industrial chain and supply chain.

On August 14, the Sichuan Electric Power Company made it clear that due to the further intensification of the current situation of power supply and demand tension. In order to ensure the safety of the Sichuan power grid, ensure the power consumption of people’s livelihood. And ensure that there is no “power cut-off” phenomenon, all industrial power users in Sichuan will implement production Full stop, high-temperature holiday. According to industry statistics, one of the two pig iron enterprises in Sichuan completely stopped production on August 15. Due to the influence of the local power curtailment policy. Due to self-generated power, normal production can be basically maintained. But this round of power curtailment will still affect its average daily output of pig iron of 8,000 tons. (“Power Restriction Tide” Restarts)

Steel supplier–Dongguan Otai Special Steel Co Ltd. We keep 1500 tons of 4140 Steel Flat bars in our warehouse.

With the further consolidation of the new crown pneumonia epidemic prevention and control situation, the national economy is still recovering, and the demand for steel in the domestic market is expected to be gradually released in the later period. The supply and demand of the steel market will form a new stability, and the price of steel will fluctuate slightly.

(1) The policies and measures to stabilize growth have been implemented one after another, and the demand for steel is expected to recover further

Since the beginning of this year, facing the impact of various unexpected factors, my country’s economy has faced great downward pressure. At present, my country’s economy is in a critical window for stabilization and recovery. While efficiently coordinating epidemic prevention and control and economic and social development, the CPC Central Committee and the State Council have made great efforts to promote the further effectiveness of a package of policies to stabilize the economy. interval operation. In the later stage, the state will actively promote effective investment, speed up project progress according to quality requirements, and strive to form more physical workload in the third quarter; make policy-based development financial instruments in accordance with laws and regulations, and accelerate investment in transportation, energy, logistics, agriculture and rural areas, etc. Infrastructure and new infrastructure construction; promote the recovery of consumption in key areas, continue the policy of exempting new energy vehicle purchase tax; implement city-specific policies to promote the steady and healthy development of the real estate market and ensure rigid housing demand. With the further effects of various policies and measures to stabilize the economy in the later period, the steel demand situation is expected to improve in the later period.

(2) Iron and steel enterprises insist on organizing production on demand, which helps to balance supply and demand in the market

According to the statistics of the Iron and Steel Association, in the first ten days of August, the daily crude steel output of key iron and steel enterprises was 1.9433 million tons, an increase of 2.8% month-on-month. Based on this, it is estimated that the national daily output of crude steel is 2.7258 million tons, an increase of 0.02% from the previous month. From the perspective of the later stage, with the gradual release of downstream demand, the supply and demand sides are expected to form a new balance.

(3) The social inventory tends to be normal, and the enterprise inventory is fluctuating and declining

Since August, the social inventory of steel has dropped to the lowest level in the same period in the past four years, and the inventory of enterprises has also fluctuated and declined, paving the way for the recovery of market confidence in the later period. As of early August, the social inventory of five types of steel in 21 cities was 10.28 million tons, a decrease of 450,000 tons or 4.2% from the end of July; a year-on-year decrease of 1.85 million tons, a decrease of 15.2%. From the perspective of enterprise inventory, as of early August, the inventory of key steel enterprises was 17.05 million tons, an increase of 450,000 tons or 2.7% over the end of July; an increase of 2.43 million tons or 16.6% year-on-year.

Whether the steel market can survive the winter smoothly this year, winter storage will become a key factor. After all, this is the window period for the last concentrated release of demand before the Spring Festival in 2023.
It is understood that this year’s winter storage is basically similar to last year’s winter storage: low inventory of raw materials, poor profitability of steel mills, and a pattern of “weak supply and demand” in fundamentals. The difference is that the center of gravity of steel prices this year has moved down significantly as a whole, and the social inventory of steel is at a historically low level.
Although winter storage has a certain room for operation this year, under the influence of sluggish demand and repeated epidemics, the enthusiasm of steel traders for winter storage is not high at present. The current steel price is still far from the psychological price of steel traders for winter storage . The author predicts that the winter storage window will not open in the short term, and it is expected to open around the end of December. The scale and intensity of winter storage this year are roughly the same as last year. In the absence of major positive news or preferential winter storage policies for steel companies, it is difficult to release more than expected winter storage demand this year.
However, under the condition of low inventory, the replenishment procurement demand brought by winter storage is still expected to drive a new round of “warm winter” market.

According to statistics, in November, the PMI (Purchasing Managers Index) of the steel industry was 40.1%, a decrease of 4.2 percentage points from the previous month, and a decline from the previous month for two consecutive months. Among them, the new order index was 34.5%, down 8.9 percentage points from the previous month. This shows that steel demand has shown a contraction trend.

Entering December, as the demand “cools down” seasonally, the steel market must be prepared to “warm up”. In the later period, as the off-season effect continues to ferment, the speed of demand contraction may further accelerate, and the weak characteristics will become more obvious.

Under such circumstances, the game between the strong expectations driven by favorable policies and the weak reality of declining demand will further intensify. Before the market finds a new equilibrium point, there is little room for steel prices to continue to rise. At the same time, due to the restart of coke price hikes, iron ore prices are still strong, and steel cost support is still strong, which will also lead to limited room for steel prices to fall. On the whole, the price trend of steel products in the short term will be dominated by high volatility.

Anmi will carry out project trials related to carbon capture, utilization and storage technology in Europe and the United States

Recently, ArcelorMittal (hereinafter referred to as Ammi) announced that it is working with Mitsubishi Heavy Industries Engineering Corporation, Mitsubishi Development Corporation, and BHP to develop carbon capture, utilization and storage (CCUS) technology-related projects in EU countries and the United States. test.
The four companies will first test the system developed by Mitsubishi Heavy Industries Engineering on a large scale at Ammi’s Ghent steel plant in Belgium (with an annual production capacity of 5 million tons) and a steel plant in the United States (not yet confirmed).

Among them, the Ghent steel plant project consists of two phases. In the first phase, Ammi will capture carbon dioxide from the blast furnace, with plans to capture 300 kilograms per day. Anmi said the second phase of the project involved testing the separation and capture of carbon dioxide from exhaust gases from reheat furnaces in hot rolling mills. The reheat furnace burns an industrial gas mixture including coke gas, blast furnace gas and natural gas. Ghent Steel will also start running the “Steelanol” demonstration project at the end of this year, which aims to capture gas from blast furnaces and convert the collected gas into ethanol.

Manfred Van Vlierberghe, CEO of AMMI Belgium, said in a statement: “We are developing two routes to decarbonize steelmaking: smart carbon use and innovative direct reduced iron. Both All routes will contribute in our journey towards decarbonizing steelmaking. The smart carbon use route can also integrate carbon capture and utilization (CCU) technology and carbon capture and storage (CCS) technology to capture the carbon dioxide emitted by the steelmaking process .”
Anmi stated that its goal is to reduce carbon dioxide emissions by 35% (compared to 2018 levels) in European operating areas by 2030, and reduce carbon dioxide emissions by 30% (compared to 2018 levels) in all operating areas worldwide.
According to reports, Mitsubishi Heavy Industries Engineering will provide technical support for related project trials, while BHP Billiton and Mitsubishi Development Corporation will provide financial support for related project trials.
BHP Billiton vigorously carried out cooperation projects, and successively carried out similar cooperation projects with China Baowu, Hegang Group, Posco, JFE Steel, Tata Steel and other enterprises.

According to the International Energy Agency, carbon capture, utilization and storage technology is a key solution for carbon reduction in hard-to-achieve carbon reduction areas such as steelmaking, and should be used in more than 53% of primary steel production in the EU by 2050. to achieve its carbon neutrality goals.
At present, there are few steel manufacturers in the world investing in R&D projects related to CCUS. Mitsubishi Heavy Industries Engineering has developed the “KM CDR ProcessTM for CO2 capture” technology in cooperation with Kansai Electric Power Company. So far, the technology has been applied in 16 factories around the world.

The United States is considering additional tariffs on China’s steel industry. In this regard, Chinese Foreign Ministry spokesman Mao Ning said that China will also take all necessary measures to safeguard its legitimate rights and interests.

China is currently the world’s largest producer of steel and aluminum. The US and EU are considering new climate tariffs on Chinese steel and aluminum. The new tariff framework was proposed within the Biden administration and will be formulated on the basis of the relevant agreement between the United States and Europe last year, mainly targeting China and other major emitters.

The U.S. is not likely to reach an agreement with the EU until the end of next year at the earliest, including details such as thresholds for imposing tariffs, according to people familiar with the matter. According to reports, the move means that the United States and Europe will seek to use tariffs, a tool usually used in trade disputes, to advance their climate agenda.