Posted on 14 Dec 2023
Daily crude steel production among the member mills of the China Iron and Steel Association (CISA) over December 1-10 declined from late November, falling by 4.2% or 84,500 tonnes/day to average 1.93 million t/d, according to the association's release on Tuesday. The average daily output during early December was also lower by 2.8% on year, Mysteel Global notes.
Based on its member-mill results, CISA also said that the country's daily crude steel output averaged 2.48 million t/d during the first ten days of this month, down 3.6% from November 21-30.
Market sources attributed the decline in daily steel output to the fact that many steelmakers slowed their production during the ten days as their profit margins had shown signs of shrinking recently due to the resilience of raw materials prices.
For example, Mysteel SEADEX 62% Australian Fines for imported iron ore hovered high at an average of $133.7/dmt CFR Qingdao during early December, edging up $0.5/dmt from the previous ten day's average.
On the other hand, domestic steel prices had been volatile over the same period, with the national price of HRB400E 20mm dia rebar for example – the barometer of the country's steel market sentiment – losing Yuan 4/tonne ($0.6/t) from late November to average Yuan 4,066/t including the 13% VAT during December 1-10, according to Mysteel's assessment.
In addition, Mysteel's survey among the 247 steel mills it monitors nationwide showed that only 37% of them were able to earn some profits over December 1-7, slipping by 2 percentage points from the prior week, as reported.
On the other hand, finished steel stocks at the association's member mills mounted by 8.8% or 1.1 million tonnes from November 30 to settle at 14.1 million tonnes as of December 10, underscoring the weakening of demand from end-users. December is usually a month when steel consumption in China slows for winter.
Source:Mysteel Global
