China's hot-rolled coil capacity expansion is set to gain pace in 2022-2023 as the country marks a slow but gradual transition from property-driven to manufacturing-driven economic growth, a development that is expected to diminish demand for long steel from the property and infrastructure sectors in the long term.
As China moves to high-end manufacturing and long steel demand plateaus, it will help grow flat steel demand, industry sources told S&P Global Platts.
China has about 14 new hot strip mills that are scheduled to be commissioned in 2022, with a combined HRC production capacity of around 41.4 million mt/year, according to Platts calculations based on official reports and market sources.
In 2023, another 10 hot strip mills will come onstream with a combined production capacity of 26.6 million mt/year.
Currently, China has about 350 million mt/year of HRC production capacity, according to some market sources. That means if the new mills are commissioned on a timely basis, China's HRC production capacity will increase by around 11.8% in 2022 and 6.8% in 2023.
The new hot strip mills width ranges from 1,450 mm to 2,250 mm. Most of them will aim to produce high-end flat steel products used in industries such as vehicle and engineering machinery manufacturing, high strength containers, oil and gas transmission pipelines, steel structure housing and prefabricated construction.