Posted on 07 Aug 2020
China iron and steel association (Cisa) member mills increased steel output to a record high in late July as stimulus and lockdown delays extended the construction season into late summer.
Cisa mills produced an average 2.17mn t/d of crude steel over 22-31 July, up by 1.6pc from 11-21 July and by 6pc from a year earlier. Cisa data include more than 100 of the country's largest steel mills.
Cisa mills have depleted their record stockpiles of steel that rose to an all-time high of 21.34mn t in the middle of February.
Cisa mills' steel inventories fell by 8.7pc from the middle of July to 13.13mn t at end of July, the lowest level since late January, Cisa data show.
Delays from Covid-19 pushed forward construction demand later into summer and led to a wave of economic stimulus to support the economy. Steel demand for infrastructure and real estate projects has led mills to skip summer maintenance shutdowns. Severe flooding in south China slowed steel consumption but is expected to add demand from reconstruction projects.
Shanghai hot-rolled coil prices at 4,060 yuan/t ex-warehouse ($569/t) on 5 August were up by Yn110/t from a week earlier and up by 27pc from a 2020 low of Yn3,190/t in early April.
By Chris Newman
Cisa's 10-day average steel output mn t/d
Source:Argus
