Posted on 13 Dec 2022
China's daily crude steel output continued to edge down in the first ten days of December to 2.71 million tonnes/day on average, lower by another 11,200 t/d or 0.4% compared with that for late November, according to Mysteel's survey among 247 blast-furnace (BF) and 85 electric-arc-furnace (EAF) steel mills nationwide.
The continuous decrease indicated that Chinese BF and EAF steelmakers preferred to keep their production at a relatively low level, given the lackluster demand during the traditional off season for steel consumption and the smaller profits they can earn on finished steel sales, Mysteel Global noted.
Mysteel's other weekly survey showed that over December 2-8, the capacity utilization rate among the 247 BF steel mills under its regular tracking declined to 82%, lower by 0.62 percentage point from the previous week. During the same period, that for the 85 sampled EAF mills slipped by another 1.67 percentage points on week to 51.31%.
Transactions in the physical market saw some improvement in early December thanks to the released demand from some end-users, with the central government's optimized COVID policies. 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 regular survey averaged 144,518 t/d over December 1-10, up 8,499 t/d or 6.2% from that for late November.
Nevertheless, domestic steel consumption, that of long steel products in particular, is likely to weaken gradually in coming weeks with the falling temperatures in northern China and the looming Chinese New Year holiday in late January, survey respondents warned.
China's domestic steel prices increased slightly in early December, with the national price of HRB400E 20mm dia rebar, a bellwether of domestic steel-market sentiment under Mysteel's assessment, growing to Yuan 3,999/tonne ($574/t) including the 13% VAT as of December 9, higher by Yuan 53/t from the end of November.
Source:Mysteel Global
