Posted on 20 Apr 2022
China's crude steel output posted a faster on-year fall of 10.5% to 243.38 million tonnes over January-March against the on-year decrease of 10% for the first two months of this year, according to the latest data released by the country's National Bureau of Statistics on April 18.
The faster drop was mainly blamed to the continuous on-year fall in output last month. For March alone, China produced some 88.3 million tonnes of crude steel, down 6.4% on year, the NBS data showed. However, the country's daily output averaged 2.85 million tonnes/day, higher by 6.4% from the average for January-February, Mysteel Global calculated based on the NBS data.
Many Chinese steel mills resumed production gradually in March with the end of Winter Paralympic Games and the winter heating season, while the recovery in output was slower due to the resurgence of COVID-19 in some regions of China, as local authorities had introduced more stringent measures to combat the virus spread, which impacted production and sales among steel mills amid slower transportation.
Some electric-arc-furnace (EAF) steelmakers also slowed down the pace in production in late March as their profit margins have been squeezed by higher scrap prices, Mysteel Global noted.
Mysteel's other survey among 247 blast-furnace steel mills in China showed that their capacity utilization rate averaged 83.76% over March 25-31, higher by 2.27 percentage points from one month earlier, but it declined by 1.67 percentage points from the seven-month high over the prior week, and the capacity utilization rate of surveyed 85 EAF mills witnessed a sharper fall of 5.96 percentage points on month to 57.38% during the same period.
For the first three months of this year, China's finished steel output registered 311.93 million tonnes, down 5.9% on year, and the volume for March slipped by 3.2% on year to 116.89 million tonnes, according to the NBS data.
Although March is the traditional peak season for steel consumption in China thanks to more pleasant weather, demand from end-users was not as robust as the market had expected due to negative impact of the COVID-19 spread, Mysteel Global noted.
For example, the daily trading volume of construction steel comprising rebar, wire rod and bar-in-coil among the 237 Chinese trading houses under Mysteel's tracking averaged just 167,670 t/d, well below the average of 205,358 t/d for the same period last year.
In March, Chinese steel prices maintained the uptrend on support of higher raw material prices, with the national average price of HRB400E 20mm dia rebar reaching Yuan 5,076/tonne ($796/t) including the 13% VAT as of March 31, up Yuan 208/t from the end of February, according to Mysteel's assessment.
Source:Mysteel Global
