Posted on 22 Jun 2022
Daily crude steel production among the 247 blast-furnace and 71 electric-arc-furnace steel mills across China regularly sampled in Mysteel's survey reversed down in the middle ten days of this month after the continuous growth over late May-early June. The data shows that output was down 9,700 tonnes/day or 0.3% from the prior ten days to 2.98 million t/d on average.
The retreat was mainly attributed to the fact that some Chinese steelmakers started to conduct maintenance or slow their production pace given their shrinking profit margins with the rapid decrease in steel prices, Mysteel Global noted.
"Recently, more EAF mills have joined the ranks of steelmakers halting operations, and some BF mills also plan to reduce their production, considering the losses they are suffering," a market source in Shanghai said.
Mysteel's other survey showed that capacity utilization among the 247 sampled BF mills came in at 90.15% over June 10-16, only up 0.01 percentage point on week, while that among the 85 EAF mills under Mysteel's regular survey slipped for the sixth consecutive week by another 2.67 percentage points during the same period to a four-month low of 48.9%.
Domestic demand from steel end-users remains depressed in the traditional off season for steel consumption, with high temperatures and heavy rains in many regions of China. This too persuaded domestic steel mills to reduce their production and ease the pressure from their high-level finished steel stocks, Mysteel Global noted.
For example, the daily trading volume of construction steel comprising rebar, wire rod and bar-in-coil among 237 Chinese trading houses under Mysteel's tracking averaged 132,335 t/d over June 11-20, lower by 30,219 t/d or 18.6% from the average for early June.
Chinese steel prices resumed their decline in mid-June with the pessimism in the domestic market. As of June 20, the national price of HRB400E 20mm dia rebar under Mysteel's assessment had dropped to Yuan 4,352/tonne ($650/t) including the 13% VAT, slumping by Yuan 469/t from ten days earlier and marking the lowest since January 27 2021.
Source:Mysteel Global
