Posted on 11 May 2021
China Iron and Steel Association (Cisa) member mills increased crude steel output to a record high in late April as wide profit margins and strong steel demand prompted larger mills to boost output.
Output from Cisa member mills rose by 3.25pc to 2.4mn t/d over 21-30 April from 11-20 April. Output during the latest 10-day period was 19.3pc higher than a year earlier when Covid-19 lockdowns slowed operations.
Cisa data include more than 100 of the country's largest steel mills. Its previous record was 10 days earlier in mid-April.
The record output comes as futures for steel and iron ore prices rise to record levels today.
October rebar futures on the Shanghai Futures Exchange rose by its maximum daily limit of 6pc by Yn340/t to Yn6,012/t. Hot-rolled coil (HRC) October futures also rose by the 6pc limit, up by Yn358/t to Yn6,335/t. China's main iron ore futures contract rose by its daily 10pc limit.
Cisa mills' steel inventories fell to 13.41mn t on 30 April, down by 15.69pc compared with 20 April with steel consumption accelerating, Cisa data show.
China's total crude steel output rose to its second-highest level in March. China will report its official April crude steel output early next week.
China has begun efforts to curb steel carbon emissions with a call for lower output in 2021, a nationwide survey of capacity cuts and Tangshan's year-long curbs aimed at improving its poorly rated air quality. But steel demand remains robust and mills outside Tangshan are active in increasing their output to offset localised curbs on output.
Shanghai ex-warehouse prices for rebar have increased by 22pc to 5,470 yuan/t and for HRC have risen by 32pc to Yn6,060/t this year as of 7 May. Tangshan billet ex-works prices have increased by 49pc to Yn5,650/t this year as of today, Yn20/t lower than the historical high of Yn5,670/t in November 2008.
Argus calculated the profit margin for Tangshan billet at Yn1,167/t in early April.
Cisa mills' 10-day crude steel output (mn t)
Source:Argus
