China’s average daily crude steel production was reported at 2.417mn mt in early May, up by a mere 0.75pc as steelmakers tamed output following major changes in the country’s steel trade policy.
Daily crude steel production rose by 17.84pc from a year ago, according to the data released by China Iron and Steel Association (CISA). Production levels were elevated from the prior year due to a lower base last year caused by the impact of the COVID-19 pandemic.
Chinese mills curtailed steel production in early May due to constraints by the new steel policy, which is more favourable for steel importers than exporters. In its drive to reduce carbon emission and pursue carbon peak and carbon neutrality targets, China has cancelled export tax rebates awarded to 146 steel products and dropped import duties on steel imports from non-ASEAN countries. The new capacity replacement measures are also slated to be implemented from June 1. These measures aim to eliminate old, obsolete, and energy inefficient excess capacities.
Early-May, daily steel products’ output, however, dipped to 2.292mn mt, down by 7.1pc from late April. But output was up by 19.81pc from the prior year, while pig iron production was at 2.06mn mt, up by 2.06pc from the prior 10-day period and up by 11.5pc from the prior year. CISA compiles production data from around 90 statistically significant steel producers across China.
| China’s average daily output in early-May (mn mt) | ||||
|---|---|---|---|---|
| Production | Early-May | Late-Apr | Change | Change (YoY) |
| Crude Steel | 2.417 | 2.399 | 0.75% | 17.84% |
| Pig iron | 2.061 | 2.019 | 2.06% | 11.50% |
| Steel | 2.292 | 2.467 | 7.10% | 19.81% |
Key steelmakers produced 24.117mn mt of crude steel in the first 10 days of May, up by 4.04pc from the prior period and up by 17.84pc from the prior year. Steel products’ output rose to 22.921mn mt, up by 1.77pc from the prior period and up by 19.81pc from a year ago.
Steel inventories at key producers in early May rose to 14.683mn mt, an increase of 9.47pc or 1.27mn mt from late April, while up by 26.36pc or 3.06mn mt from the beginning of the year.