Posted on 02 Sep 2022
China's daily crude steel output rose steadily over the last eleven days of August to average 2.76 million tonnes/day, up by another 58,200 t/d or 2.2% from the prior ten days, Mysteel estimated, based on its regular survey among 247 blast-furnace and 85 electric-arc-furnace steel mills nationwide.
After their earlier production cutbacks, some Chinese steelmakers - BF mills in particular - have started to gradually ramp up production to prepare for the coming traditional peak season for steel consumption over September-October. It was this that contributed to the growth in crude steel output in late August, survey respondents said.
However, production of many EAF steel mills was still constrained by the limited scrap availability and tight electricity supplies in some regions, Mysteel Global learned.
Mysteel's other weekly survey showed that capacity utilization among the 247 sampled BF mills recovered further to 85.27% over August 19-25, up for the fourth week by another 1.38 percentage points on week, while that for the 85 surveyed EAF mills declined for the second week to 39.42%, down 0.66 percentage point from the previous week.
The continuous rise in output led finished steel inventories held by Chinese steel mills to accumulate gradually since mid-August, as demand from end-users remained lackluster - even though the seasonal peak period was just around the corner.
Over August 25-31, inventories of the five major carbon steel products comprising rebar, wire rod, hot-rolled coil, cold-rolled coil and medium plate held by the 184 Chinese steel mills under Mysteel's regular survey mounted at the faster pace of 3.4% on week to 5.05 million tonnes, as against the on-week rise of 2.4% over the prior week.
Steel transactions in the physical market did not improve significantly in late August, with 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 averaging 144,524 t/d over August 21-31, slightly higher by 2,036 t/d from that for mid-August.
Chinese steel prices softened in late August due to the depressed sales, with the national price of HRB400E 20mm dia rebar, a bellwether of domestic steel-market sentiment, reaching Yuan 4,134/tonne ($599/t) including the 13% VAT as of August 31, losing Yuan 102/t from that on August 19.
For the whole month of August, daily crude steel output among the surveyed steel mills posted an on-month rise of 575,000 t/d or 2.2% to average 2.69 million t/d, but it was still lower by a large 7.7% on year, the survey showed.
Source:Mysteel Global
