China’s average daily crude steel production rose by 12.33pc in mid-January to 2.218mn mt from a year ago and increased by 1.02pc from early-January, according to the data released by China Iron and Steel Association (CISA). China’s key producer maintained production levels despite adverse weather conditions amid stable demand from end-users.
CISA expects steel demand to rise in 2021 fueled by government policies to mitigate the impact of the COVID-19 pandemic on the economy. In a press conference on Wednesday, CISA’s top brass reiterated China’s commitment to reduce carbon emission and thereby cut crude production in 2021, but emphasized on alternative means like increased billet imports to support steel consumption.
| China’s average daily output in mid-Jan (mn mt) | ||||
|---|---|---|---|---|
| Production | Mid-Jan | Early-Jan | Change | Change (YoY) |
| Crude Steel | 2.218 | 2.195 | 1.02% | 12.33% |
| Pig iron | 1.96 | 1.943 | 0.89% | 12.63% |
| Steel | 2.06 | 2.051 | 0.41% | 8.52% |
Daily steel products’ output increased to 2.060mn mt, up by 8.52pc from the prior year and up by 0.41pc from early-January. Pig iron production was at 1.960mn mt, up 12.63pc from the prior year, while down by 0.89pc from the prior 10-day period. CISA compiles production data from around 90 statistically significant steel producers across China.
In the first 20-days of January, key steelmakers produced 44.040mn mt crude steel, up by 11.71pc from the prior year period. Pig iron production rose by 11.07pc to 38.999mn mt and steel product output rose by 9.91pc to 41.013mn mt from the prior year period.
Steel inventories at key producers in mid-January stood at 14.043mn mt, an increase of 7.80pc or 1.016mn mt from early-January, while up by 29.9pc or 3.24mn mt from the prior year. Higher inventories signals a slowdown in construction activity and also indicated steel prices could come under pressure in the coming days.