NBS: China's Oct daily output dips but total still up 2%
October crude steel output was up by a large 9.1% on year
and took the country’s total output over the full ten months to 782 million
tonnes, up by 6.4% from January-October last year.
The on-month dip in daily output – from September’s all-time high of 2.7 million t/d – can be explained by the fact that October had one extra day in the month, Mysteel notes. But even factoring this in, industry pundits had still expected a better result for October as finished steel prices had remained strong since the beginning of the month and mills have generally operated at high utilization rates, they said.
Indeed, blast furnace capacity utilization among the 247 Chinese steel plants Mysteel monitors has been high since November 1 at nearly 82%, as reported.
The surprise of the pundits on the daily output number notwithstanding, Chinese crude steel production this year continues to sizzle. Market sources note that if the steelmakers continue producing at this rate, crude steel output this year could exceed 900 million tonnes. Given that the January-October result translates to an annualized total of 938.4 million tones, this seems almost guaranteed. Last year, China produced 831.7 million tonnes of crude steel, Mysteel notes.
“Some smaller mills in North China’s Hebei and Henan provinces were forced to suspend production due to poor air quality last month, which could be partly the reason for the drops in output,” a Shanghai-based analyst said.
As for finished steel output over January-October, China produced 918 million tonnes during the ten months, up 7.8% on year. During October alone, finished steel tonnage totalled 98 million tonnes, up 11.5% on year, the NBS statistics show.
“The gratifying profits they’re making from sales of rebar will likely lead the steelmakers to produce more,” a Shanghai-based trader said, explaining that long product makers are partly filling the gap left by the easing back of flat steel production due to the bleak demand outlook.
As Mysteel's latest monthly survey showed, the mills’ profits on rebars spanning September 26-October 25 advanced by Yuan 88/tonne ($12.6/t) on month to Yuan 1,029/t, while over the same period mill margins on HRC dropped by another Yuan 124/t on month to Yuan 469/t. This is based on the findings of Mysteel’s latest production study of 101 steel firms nationwide comprising 91 blast furnace mills and 10 re-rollers.
Written by Thea Feng, fengyx@mysteel.com
Edited by Russ McCulloch, russ.mcculloch@mysteel.com
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