In mid-June, daily crude steel output by China Iron & Steel Association (CISA) member mills increased by 2.6pc or 600,900mt from the first ten days of June.
Chinese crude steel output stayed boosted amid hopes of demand recovery. The average daily output in the period June 11-20 was 2.4mn mt, according to the association’s release on June 23.
CISA data showed the finished steel stock with member mills was at 15.7mn mt on June 20, which was higher by 10.3pc from the levels reported on June 10. On May 31, the stock stood at 14.23mn mt These stocks were almost 35pc higher than early 2021 levels.
Even after the announcement of production curbs in Hebei province in mid-June, most mills were unwilling to lower their production. Steel prices too stayed firm despite the government effort to control surging prices.
CISA added that amid strict controls imposed by the central government, demand for the new property has dropped significantly. Seasonal impact due to rains also affected construction demand in a few major steel-consuming regions in Southern China.
Finished steel demand, especially, for HRC was affected by production halts announced by many automakers in China, Japan, and Southeast Asian auto hubs. The shortage of semiconductor chips required for production impacted the industry.
Iron ore prices rebound
Chinese iron ore prices for 62pc ferrous content were $216.6/mt cfr north China on Wednesday, rising $4/mt from a day prior. Market participants expect prices to stay range-bound. Although the Chinese government is trying to control surging iron ore prices, participants believe that the plan is unlikely to work.