Posted on 18 Jun 2021
China’s crude steel output continued to grow rapidly over January-May, with the total volume surging 13.9% on year to 473.1 million tonnes, according to the latest release by the country’s National Bureau of Statistics (NBS) on June 16. However, the on-year growth has slower compared with the 15.6% on-year gain for the January-April period.
For May alone, China produced 99.5 million tonnes of crude steel, up 6.6% on year – slower than the sizzling on-year growth of 13.4% recorded in April – while the daily output last month averaged 3.21 million tonnes/day, down 1.6% from the average for April, Mysteel Global calculated based on the NBS data.
China’s finished steel production reached 124.7 million tonnes in May, up 7.9% on year and hitting a new high. This took total output for the first five months to 576.6 million tonnes, jumping by 16.8% from the same period last year, the official data showed.
In fact, despite the on-month retreat in daily production, China’s steel output still stayed at a very high level in May, as most Chinese steel mills kept their run-rates high last month given the positive margins they could earn on finished steel sales. Nonetheless, in the latter half of May their profits were squeezed largely with the fall in steel prices.
For example, the profits on rebar sales among the 91 Chinese blast-furnace steel mills sampled by Mysteel monthly averaged Yuan 176/tonne ($27.5/t) in May, lower by Yuan 543/t on month, while the margins on sales of hot-rolled coil averaged Yuan 477/t despite the large retreat of Yuan 688/t from the April average.
Mysteel’s other weekly survey showed that furnace capacity utilization among the 247 BF mills it samples grew steadily in May to reach 91.41% over May 21-27, up 1.48 percentage points on month, while that among the 71 EAF mills Mysteel checks slipped by 2.06 percentage points during the same period to 74.36% due to the shrink in profits.
Chinese steel prices experienced significant fluctuations in May following central government warnings about the rapid growth in bulk commodities prices, with the national price of HRB400E 20mm dia rebar reaching Yuan 5,257/t including the 13% VAT as of May 31, higher by Yuan 2/t from the end of April but far below the record high of Yuan 6,348/t set on May 12, according to Mysteel’s data.
Source:Mysteel Global
