The China Iron and Steel Association (CISA) has announced that in mid-August (August 11-20) this year, the average aggregate daily crude steel output of large and medium-sized steel enterprises in China - all CISA members - totaled 2.0542 million mt, up 0.3 percent compared to early August (August 1-10). During the previous period, early August, the average aggregate daily crude steel output had risen by 5.26 percent, which means that the rise of production continued in mid-August, though with slower rising pace, thereby resulting in oversupply in the market.
The output rise resulted in increases in the inventory levels in the Chinese steel market. As of August 20, the finished steel inventories of large and medium-sized steel enterprises in China amounted to 13.15 million mt, increasing by 2.23 percent compared to August 10. This followed a 13.25 percent increase in stocks in the previous 10-day period.
High steel production and stocks put pressure on steel prices in August, but the situation has changed in the first half of September due to better sentiments. The rising iron ore prices and positive macro policy bolstered steel prices, e.g. the average rebar price in China increased by RMB 83/mt ($12/mt) from August 30, rising to RMB 3,810/mt ($536,2/mt) ex-warehouse by September 9, according to SteelOrbis data.