Posted on 26 Feb 2021
China iron and steel association (Cisa) member mills increased crude steel output in mid-February to a record high of 2.282mn t/d over 11-20 February, which covered the lunar new year holiday, up by 5.9pc from 1-10 February and by 24pc from a year earlier.
Daily pig iron output rose by 5.48pc to 2.021mn t from 1-10 February and by 17pc from a year earlier.
Daily finished steel output rose by 5.1pc to 2.121mn t from 1-10 February and by 25.3pc against the previous year.
Steel prices and crude steel output hit a record 1.053bn t last year as demand from construction and manufacturing quickly recovered after Covid-19 lockdowns. Shanghai hot-rolled coil (HRC) prices rose by 1,780 yuan/t, or 56pc, from a 2020 low of Yn3,190/t ex-warehouse in April to Yn4,970/t ($770/t) in December, its highest level since the price series started in February 2016.
China has stimulated its economy after the lockdowns, with construction activity and manufacturing strength carrying over into 2021, adding to demand from recovering global markets.
Beijing has begun to push green targets under its new five-year plan with some officials calling for lower steel output in 2021. But so far maintenance disruptions and pollution restrictions have not restrained growth.
March and April are considered the traditional high season for steel consumption, especially for construction steel of rebar and wire rod. China's steel inventories peak in late February to early March ahead of the spring drawdown, while bullish market outlooks kept more output on line over the 11-17 February lunar new year holiday.
Chinese mills' stockbuild remains well behind the pace last year when Covid-19 lockdowns halted demand and sent inventories to record levels. Cisa reported its members' steel inventories at 17.55mn t during 11-20 February, up by 21.3pc from 1-10 February and 17.8pc lower than 21.34mn t a year earlier. Cisa members' inventories increased to a record 21.4mn t on 10 March 2020. But stocks dropped quickly as China quickly controlled the spread of Covid-19 and reopened its economy.
"We haven't seen any major negative factors to bring a sharp price fall this year by far," a north China producer said.
Shanghai HRC prices have increased by Yn250/t to Yn4,830/t over 31 December to 24 February. Shanghai rebar prices increased by Yn90/t to Yn4,560/t during the same period.
Cisa 10-day crude steel output (mn t)
Source:Argus
