China’s daily average crude steel output recovered in mid-August (11-20) to 2.138mn mt, up by 4.6pc from early August, according to CISA data. Compared to a year ago production was down by 1.07pc amid directions to maintain output levels below 2020 levels through the second half of 2021.
Chinese mills pumped up production compared to the prior 10-days despite weak demand. This could be attributed to maintaining high utilization levels. Steel demand in the domestic market has weakened amid a slowdown in the construction sector.
|China’s average daily output in mid-August (mn mt)|
Daily steel products’ output rose to 2.061mn mt in mid-August, up by 7.59pc from early August and down by 0.32pc from the prior year. Pig iron production was at 1.871mn mt, up by 2.12pc from the prior 10-day period, while down by 1.82pc from the prior year.
CISA compiles production data from around 90 statistically significant steel producers across China. Key steelmaker’s cumulative crude steel production until mid-August rose to 42.521mn mt, down by 7.6pc from the prior-year period. Steel products’ output rose to 40.412mn mt down by 8.61pc from a year ago.
Steel inventories at key producers increased due to the rise in production. In mid-August, steel inventories rose to 14.934mn mt, up by 2.13pc or 312,200mt from early August. Inventories are higher by 811pc or 1.120mn mt from the end of July.
In July, China’s crude steel production fell amid the government’s strict stance to curb production and reduce carbon emissions. China’s steel production declined to 86.79mn mt in July, down by 8.4pc from a year ago. While in the Jan-July period, production was up by 8pc at 649.33mn mt.