China’s crude steel output will likely rise by 7.1 percent from 928 million mt in 2018 to 994 million mt this year, according to He Wenbo, executive vice-chairman of the China Iron and Steel Association (CISA), exceeding the previous forecast of the association.
In the January-September period this year, China’s crude steel output amounted to 748 million mt, up 8.36 percent year on year. “If the crude steel output in the fourth quarter remains at a high level as in the first three quarters, the overall crude steel output in 2019 will amount to 1 billion mt, while from the statistics in September we noticed that growth slowed down and will likely continue the slowdown in the remaining period of the year,” the CISA official stated.
He Wenbo said that China’s export and inventory volumes of finished steel have declined, indicating that increase in crude steel output has been consumed by the local market. For instance, in the first nine months of the year, China exported 50.31 million mt of finished steel, down five percent year on year. According to the CISA’s data, as of October 24 the inventory of finished steel in China amounted to 12.56 million mt, down 5.6 percent month on month. He also indicated that the scale of China’s infrastructure construction has contributed to the positive growth of China’s crude steel output. Accordingly, in the January-September period this year, output of rebar and wire rod, mainly used in building and construction, recorded a year-on-year growth of 14.85 percent.
In the first nine months of the year, CISA members’ sales revenues amounted to RMB 3.18 trillion, up 11.6 percent year on year, while they recorded an aggregate gross profit of RMB 146.6 billion, down 32 percent year on year, the CISA stated. Mr. He stated that high-priced raw materials had dragged down steelmakers’ profitability, while he predicted that raw material prices will move down in the coming period.