Posted on 27 Aug 2021
Daily crude steel output among the member mills of the China Iron & Steel Association (CISA) recovered over August 11-20, rising by 4.6% or 94,000 tonnes/day from early August to average 2.14 million t/d, according to the association’s latest release on August 25, as some blast-furnace (BF) steel mills had ramped up output after the maintenance.
Based on the performance of its member mills, CISA estimated the country’s daily crude steel output at 2.8 million t/d during mid-August, up 3% from the prior ten days. As of August 20, nationwide finished steel stocks had grown by 2.1% or 312,200 tonnes from August 10 to reach 14.93 million tonnes, also 28.5% higher from that at the start of 2021, the CISA data showed.
In contrast, the findings of Mysteel’s survey among a larger group of the 318 Chinese steel producers comprising 247 BF and 71 electric-arc-furnace (EAF) mills differed from CISA’s, as their average daily crude steel production over August 11-20 had slipped 1.3% or 37,900 t/d from August 1-10, to reach a four-month low of 2.93 million t/d.
The disparity could be due to the sample size and the fact that EAF mills' production has been curtailed by local power rationing, and many provinces in China including the top three steel production bases including Hebei, Jiangsu and Shandong are still carrying out their local steel output curbing efforts, though those that have met the ultra low emission standards, many being large-sized and state-owned, are freed from the restriction measures, Mysteel Global noted.
The majority of CISA's member mills are large- and medium-sized steel mills in China, and it is hard to judge whether their steel output will be sustainable, as China's spot steel prices saw steady declines in mid-August, with the national price of HRB400E 20mm dia rebar under Mysteel’s assessment down Yuan 83/tonne ($12.8/t) from August 10 to reach Yuan 5,245/t and including the 13% VAT as of August 20.
China's steel mills, however, saw their steel profit margins improve, as raw material price with iron ore in particular, had slumped more subtantially during the period, and Mysteel SEADEX 62% Australian Fines, for example, eased $22.2/dmt from August 10 to $139.55/dmt CFR Qingdao by August 20.
By mid-August, domestic steel demand remained lackluster, as the daily trading volume of construction steel including rebar, wire rod and bar-in-coil among the 237 trading houses Mysteel surveys nationwide averaged 175,890 t/d over August 11-20, down but just 2,875 t/d over the ten days.
Source:Mysteel Global
