China’s daily crude steel output fell to 2.213mn mt in mid-March, down by 1.46pc from early-March amid tight pollution curbs to reduce heavy smog in major cities. Key steel producers, mainly in Tangshan, Hebei reduced output as local authorities warned mills of severe fine for failing to comply with the restrictions. Seven blast furnaces in the city of Tangshan were shut last week as per local media.
Compared to a year ago, crude steel production in mid-March rose by 20.53pc, according to CISA, which compiles production data from around 90 statistically significant steel producers across China. Production level in year over year comparison is elevated due to a lower base last year due to the impact of COVID-19. A healthy demand outlook is supporting the steel industry in China.
In mid-March, daily steel products output fell to 2.076mn mt, down by 1.44pc from early-March, while up by 18.07pc from a year ago. Pig iron production was at 1.913mn mt, down by 2.87pc from the prior 10-day period and up by 18.07pc from the prior year.
Due to production curbs and stricter emission control measures, Chinese mills have reduced scrap purchases bids are focusing on the import of semis, such as billet. Steelmakers are also keen on moving up the value chain to produce high-end steel products but at lower volumes.
|China’s average daily output in mid-Mar (mn mt)|
Key steelmakers cumulative crude steel production until March 20 rose to 44.599mn mt at an average daily crude steel output of 2.229mn mt, down by 1.36pc from the prior month and up by 22.35pc from the prior-year period. Steel products output rose to 41.828mn mt at a rate of 2.091mn mt, down by 3.84pc from the prior month and up by 21.77pc from the prior year period.
Steel inventories at key producers in mid-March fell to 17.508mn mt, down by 2.10pc or 375,000mt from early-March. Inventories are higher by 6.69pc or 1.09mn mt from the end of February and an increase of 5.887mn mt or 50.67pc from the beginning of the year.