In July this year, China’s outputs of pig iron, crude steel and finished steel totaled 71.4 million mt, 82.94 million mt and 114.36 million mt, decreasing by 4.15 percent, 9.46 percent and 8.91 percent month on month, while decreasing by 8.0 percent, 9.0 percent and 4.0 percent year on year. The drop in production was far higher than expected and happened mainly in the second half of the month, when expectations for the government support after the third plenum of the Chinese Communist Party were not realized. By the end of July, around 80-85 percent of all major mills were incurring financial losses. The shift to new long steel standards also put significant pressure on prices and resulted in lower production.
In the January-July period this year, China’s outputs of pig iron, crude steel and finished steel totaled 509.68 million mt, 613.72 million mt and 813.41 million mt, decreasing by 3.7 percent, decreasing by 2.2 percent, and increasing by 1.3 percent year on year, respectively, as announced by China's National Bureau of Statistics (NBS) on August 15. The crude steel production decline was 1.1 percentage points faster than the 1.1 percent decrease seen in the January-June period.
In early August (August 1-10) this year, the average aggregate daily crude steel output of large and medium-sized steel enterprises in China - all CISA members - totaled 2.0034 million mt, up 1.52 percent compared to late July (July 21-31) this year, rising slightly following the big decline of 8.14 percent recorded in late July.
However, most market sources expect that total steel production in August should be below the July volume, given that the downtrend has accelerated and that the losses of mills have deepened. Over the past two months, the weak demand in China has been impacting production.
