Posted on 25 Oct 2022
Despite a healthy rise in China's crude steel output last month, this was not enough to alter the trend of the cumulative total for this year, the latest data released by the country's National Bureau of Statistics (NBS) on October 24 show, with the January-September total lower by 3.4% compared with the first nine months of last year at 780.83 million tonnes.
However, the rate of the on-year decrease slowed compared with the 5.7% decline recorded for the first eight months, as Chinese mills' production recovered significantly in September, the NBS statistics show.
For September alone, China produced 86.95 million tonnes of crude steel, higher by 17.6% on year, with the daily output reaching 2.9 million tonnes/day on average, jumping by 7.1% from that for August, Mysteel Global calculated based on the NBS data.
The on-month growth in September occurred mainly because many Chinese steelmakers including blast-furnace (BF) and electric-arc-furnace (EAF) mills ramped up production for sales during September-October, usually the two months when steel consumption peaks as users are encouraged by the pleasant weather in most regions of China.
The result was in line with Mysteel's weekly survey, which showed that the capacity utilization among the 247 BF mills across China under its tracking registered 89.14% over September 23-29, up 2.31 percentage points from one month before, while that among the surveyed 85 EAF mills posted a sharper on-month rise of 7.26 percentage points to 53.09% during the same period.
Besides, domestic steel demand from end-users had recovered somewhat in September, which improved market sentiment to some extent and gave Chinese steel producers some confidence to increase their output, 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 180,014 t/d in September, higher by 32,583 t/d or 22.1% from the prior month, though still much lower than the average of more than 200,000 t/d for a peak demand month.
The recovery in mills' output and the lower-than-expected demand put some pressure on domestic finished steel prices, with the national price of HRB400E 20mm dia rebar, a bellwether of domestic steel-market sentiment, reaching Yuan 4,126/tonne ($569/t) including the 13% VAT on average in September, down Yuan 136/t from the previous month, according to Mysteel's assessment.
Last month, finished steel output reached 116.2 million tonnes, higher by 12.5% on year, while the total production for the first nine months was 1 billion tonnes, down 2.2% from the same period last year, according to the NBS data.
Source:Mysteel Global
