China’s average daily crude steel production by key producers dipped to 2.379mn mt in mid-May, down by 1.59pc from early May and up by 14.37pc from a year ago, according to the data released by China Iron and Steel Association (CISA).
The drop in output from the prior 10-days indicates a move towards holding back production in the absence of export rebate and stricter warning from authorities to avoid speculation of steel prices. Authorities have initiated a round of inspections aimed at checking speculation, which could stabilize domestic steel prices in the near term, according to CISA.
Leading steelmaker Jiangsu Shagang’s, Monday, lowered finished steel prices for late May shipments. Rebar (HRB400, 16-12mm) offers are at CNY5,850/mt ($910/mt) ex-works inclusive of 13pc VAT, down by CNY500/mt from mid-May prices. While offers for HRC Q235B remain unchanged at CNY6030/mt on strong demand.
|China’s average daily output in mid-May (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-May, daily steel products’ output rose to 2.295mn mt, marginally up from early April and up by 17.2pc from the prior year. Pig iron production was at 2.040mn mt, down by 1.01pc from the prior 10-day period and up by 9.18pc from the prior year. CISA compiles production data from around 90 statistically significant steel producers across China.
Key steelmakers produced 47.855mn mt of crude steel in the first 20-day of April, at a daily average of 2.392mn mt, up by 2.96pc from the prior period and up by 15.81pc from the prior year. Steel products output rose to 45.731mn mt, up by 1.52pc from the prior period and up by 18.09pc from a year ago.
Steel inventories at key producers in mid-May rose to 14.639mn mt, up 44,300mt from early April, while up by 9.14pc or 1.225mn mt from the end of April. Inventories are up by 25.97pc or 3.018mn mt from the beginning of the year.