Speaking at SteelOrbis Italy Forum 2024, held in Milan on October 8, Hüseyin Ocakçı, deputy general manager and Middle East general manager of CIEC Group, said that in 2024 China’s crude steel production has been at an average of 2.25 million mt per day, with a capacity utilization rate of 84.45 percent, compared to 2.39 million mt per day and 89.08 percent, respectively, in 2023. He noted that Chinese mills are maintaining a very low production level due to financial losses and, since production has already seen a five percent decrease, no further production cuts are expected.
Looking at Chinese exports, Mr. Ocakçı explained that China is not the biggest exporter in terms of percentage of its production, with China exporting six percent of its production in 2022 and nine percent in 2023. “When you compare it to other exporting countries, the share of exports in production stands at around 30-50 percent, but since the production is huge in China, of course it has a big effect on the market,” he noted.
The CIEC official noted that, while analyzing the market condition, the level of stocks is a clear indicator, and so it is important to look at iron ore stocks to understand the price situation as China is the biggest importer of the raw material. As of September 27, China’s total iron inventory stood at 150.52 million mt, 32 percent higher than last year and higher stocks normally signal a decline in prices. However, he said, for three to four months, iron prices have not been able to break the $90/mt threshold, prices touched $90-91/mt ten days ago but went up again to $113-115/mt. Looking at rebar inventory, since production is low, destocking continues. Rebar inventory stood at 4.15 million mt as of September 27. While HRC inventory stood at 5.60 million mt as of the same date there was also destocking movement in the HRC segment.
Finally commenting on the prices, Ocakçı said that China went into its recent eight-day holiday with a $40/mt price increase and, on the first day after the holiday, October 8, the market came back with a price increase again, a minimum of $15-40/mt roughly.
