China’s average daily crude steel production rose to 2.324mn mt in mid-April up by 2.21pc from early April and up by 19.10pc from a year ago, according to the data released by China Iron and Steel Association (CISA). Mills ramped production prompted by an increase in domestic steel prices.
Steel supply is tight in China and steelmakers have reported a spectacular increase in the profit margins on the back of robust domestic demand and short supply in the international market. Domestic steel prices have moved up by 20pc since January, according to local media. Leading steelmaker Jiangsu Shagang’s rebar (HRB400, 16-12mm) offers are at CNY5,250/mt ($808.47/mt) ex-works inclusive of 13pc VAT for late-April deliveries, up by 11pc from early-January prices. While offers for HRC Q235B are at CNY5580 ($850/mt) ex-works, up by 6pc from early January. This week, Shagang left prices unchanged for late April shipments.
Chinese mills are expected to focus on the domestic market after a 24pc increase in exports in January to March compared to the prior year. China’s finished steel exports rose to 17.7 million tons in Q1, but are expected to slow on an anticipated lower tax rebate on exports from April onwards.
|China’s average daily output in mid-April (mn mt)|
Production levels were elevated from the prior year due to a lower base last year caused by the impact of the COVID-19 pandemic.
In mid-April, daily steel products’ output rose to 2.213mn mt, up by 5.87pc from early April. But output was up by 17.9pc from the prior year, while Pig iron production was at 1.986mn mt, up by 1.33pc from the prior 10-day period and up by 11.48pc from the prior year. CISA compiles production data from around 90 statistically significant steel producers across China.
Key steelmakers produced 45.923mn mt of crude steel in the first 20-day of April, output is up by 3.65pc from the prior period and up by 17.83pc from the prior year. Steel products output rose to 43.034mn mt, up by 1.04pc from the prior period and up by 16.29pc from a year ago.
Steel inventories at key producers in mid-April rose to 15.909mn mt, an increase of 2.67pc or 413,800mt from early April, while up by 8.18pc or 1.2mn mt from the end of March. Inventories are down by 8.67pc or 1.51mn mt from the prior year period.