China's Apr new-high daily steel output no alarm yet
Source: Mysteel
May 15, 2018 15:58
China’s daily crude steel output for April hit a record high at 2.557 million tonnes/day basing on the latest data released by China’s National Bureau of Statistics on May 15, but it is not as alarming as it sounded, as domestic steel market and prices have so far been holding well, according to the market sources.
“Daily steel output in April seemed high according to the NBS data, but the actual output in the days when induction furnaces existed could have been way higher if all the contribution from these facilities had been tracked,” an official from the China Iron & Steel Association commented, adding that steel output in April and May tends to be higher as seasonal demand is robust too.
April’s daily crude steel output was up 7.1% on month too, as many Chinese steel producers in the 2+26 cities have been able to ramp up their output gradually with the end of the four-month winter restriction at the end of March, Mysteel notes.
On the other hand, the widespread rebound of domestic steel prices in April after the slumps in March due to a revival of downstream demand also spurred steel mills to beef up production, a Beijing-based steel analyst explained.
Besides the blast furnace mills, companies operating electric arc furnaces also accelerated their production after noting that their margins had returned to a decent level of Yuan 200-300/tonne ($32-48/t), he added.
Mysteel’s daily average price of HRB 400 20mm dia rebar, the most representative steel product nationwide, rose by Yuan 329/t or 8.7% on month to Yuan 4,105/t including the 16% VAT as of April 28.
For the whole month of April, China’s crude steel output jumped 4.8% on year or by 3.7% on month to 76.7 million tonnes, and the country’s crude steel production over January-April to nearly 289 million tonnes, higher by a healthy 5% on year, according to NBS.
Nevertheless, Chinese steel mills, if seeking for a sustainable development, should be always alert to supply and adjust their operational pace accordingly, according to the CISA official.
Last month, China’s output of finished steel also surged, jumping by 8.5% on year and 2.8% on month to 92.3 million tonnes, while the total output over the first four months climbed another 5% on year to 337 million tonnes, NBS data showed.
Written by Venus Wang, wangyi@mysteel.com and Hongmei Li, li.hongmei@mysteel.com
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