In April, China produced more crude steel that the rest of the world combined, the second month in a row that this had eventuated.
As the map below reveals, supplied by the World Steel Association, this was a continuation of the dominance seen in 2015.
According to the group, China produced 803.8 million tonnes of steel during the year, close to eight times more than second placed Japan with 105.2 million tonnes.
In other words, it was China in first place, daylight second.
Not only that, combining the amount of steel produced in Japan with the next 18 highest steel producing nations, the amount produced totalled 692.3 million tonnes, only 86.1% of the amount produced in China.
According to the China Metallurgical Planning and Research Institute, a Chinese government-led body, China’s steel industry can produce as much as 1.15 billion tonnes of steel annually given existing infrastructure, suggesting that capacity utilisation for the sector was only 69.9% in 2015.
Even when operating at around two-thirds capacity, the amount of steel produced in China last year was still well in excess of internal demand.
The China Metallurgical Planning and Research Institute estimates that only 664 million tonnes of steel product were consumed in China last year, with much of the excess supply flooding international markets, depressing prices further and leading to an increase in trade disputes between Chinese mills and operators in other nations.
As a result of the acute overcapacity in China’s steel industry, something that has depressed steel prices globally and led to crippling losses at many marginal steel mills, China’s State Council plans to cut crude steel capacity by 100-150 million tonnes by 2020, equating to around a 12.5% cut to China’s 1.15 billion tonnes of current crude steel capacity.