ACCOUNT PROFILE

China’s August crude steel output slumps: Correction

Posted on 16 September 2021

China's crude steel output in August fell to the lowest level since March 2020 after the central government required steel mills to keep full-year steel output and exports flat to 2020 levels.

Crude steel output at 83.24mn t in August fell by 4.3pc from July and by 13.2pc against a year earlier, the National Bureau of Statistics (NBS) said. Average daily production fell by 4pc to 2.69mn t/d from 2.8mn t/d in July and by 14.1pc from 3.13mn t/d in June. January-August crude steel output rose by 5.3pc from the same period last year to 733mn t.

Finished steel output in August fell by 10.1pc to 109mn t from a year earlier. Pig iron output fell by 11.1pc to 71.53mn t over the same period.

China's August steel exports fell to a 2021 low in August with mills ordered to keep exports flat to 2020 levels and export taxes increased in May and August to divert steel supplies back to China.

Tighter steel supplies drove steel prices up from August. Argus Shanghai rebar ex-warehouse prices increased by 350 yuan/t or 6.8pc during 3 August-14 September. Argus Shanghai hot-rolled coil prices increased by Yn100/t or 1.8pc over the same period.

China produced 1.065bn t crude steel in 2020. China needs to limit crude output to 332mn t during September-December to achieve its full-year target for 2021. China produced 364mn t crude steel output in September-December 2020, so policymakers will push for crude output cuts of 32mn t, or 8.7pc, for the rest of the year. 

Source : Argus