Posted on 16 Nov 2021
China's crude steel output in October fell to the lowest since December 2017 as mills cut production given power shortages, shrinking profits and Beijing's push to zero out steel output growth.
Crude steel output of 71.58mn t in October fell by 2.9pc from September and by 23.3pc on the year, according to China's National Bureau of Statistics. The average daily decline dropped by 6.1pc to 2.31mn t/d from 2.46mn t/d in September and by 14.1pc from 2.69mn t/d in August.
Year-to-date output turned negative for the first time this year, with January-October output down by 0.7pc to 877mn t.
Finished steel output in October fell by 14.9pc to 102mn t from a year earlier. Pig iron output decreased by 19.4pc to 63.03mn t over the same period.
A post-holiday rebound in steel output in early October was short-lived as mill margins flattened or turned negative and power shortages eased but persisted in provinces like Jiangsu.
Margins were squeezed by top grade coke prices rising to 4,220 yuan/t by late October, up by 72pc since January, while steel prices slid from the slowdown in construction steel demand. Argus Shanghai rebar prices decreased by Yn1,170/t ex-warehouse or by 19.7pc from 11 October to 12 November. Mills expanded maintenance outages in response.
Baowu Steel on 19 October shut a blast furnace for 36 days of maintenance, cutting 360,000t of iron output. Benxi Steel on 15 October shut a blast furnace for 45 days, reducing 450,000t of iron output.
China's steel exports in October fell to a low for 2021 after mills were ordered to keep exports flat from 2020 levels.
China produced 1.065bn t of crude steel in 2020. It has to limit crude output to 188mn t for November-December to achieve its full-year target of zero growth for 2021. China produced 181mn t crude steel in November-December 2020. Most participants expect the target to be met given weaker domestic steel demand and extensive production curbs in the winter heating season.
Source:Argus
