China’s crude steel output falls at faster pace in Jan-Apr, providing some support for prices

Friday, 17 May 2024 11:35:51 (GMT+3)   |   Shanghai
       

In the January-April period this year, China’s outputs of pig iron, crude steel and finished steel totaled 284.99 million mt, 343.67 million mt and 451.03 million mt, decreasing by 4.3 percent, decreasing by 3.0 percent, and increasing by 2.9 percent year on year, respectively, as announced by China's National Bureau of Statistics (NBS) on May 17. The crude steel production decline was faster than the 1.9 percent decrease seen in January-March.

In April alone, China’s outputs of pig iron, crude steel and finished steel totaled 71.63 million mt, 85.94 million mt and 116.52 million mt, decreasing by 8.0 percent, 7.2 percent and 1.6 percent year on year. Compared to March, crude steel production in China in April declined by 2.6 percent.

The slack demand from downstream users and the shrinking profitability on the steelmakers’ side made steelmakers cut their crude steel outputs in April. However, the lower production managed to provide some support for prices, with local rebar spot prices increasing by 6.5 percent during April, according to SteelOrbis’ data. Following the Labor Day holiday in early May, steel prices failed to improve more in line with expectations as demand had not improved as expected, though China issued several stimulus policies, including issuing ultra-long sovereign bonds and started to lift the restrictive policies of the real estate industry in more regions in the country.

In early May (May 1-10) this year the average aggregate daily crude steel output of large and medium-sized steel enterprises in China - all CISA members - totaled 2.1915 million mt, down 0.36 percent compared to late April (April 21-30) this year. It is thought that crude steel output will likely remain at stable levels after the recent declines in May as the weather is getting hotter, which will exert a negative impact on the demand for steel.


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