The May result took total crude steel production over the first five months to 405 million tonnes, the NBS data shows, higher by 10.2% on year, with the growth in production over the five months being 0.1 percentage point higher than that for the first four months of this year.
The on-month growth in May was mainly thanks to steel mills’ high enthusiasm for production, as the steelmakers wanted to produce as much as possible to guarantee their sales and profits before the country’s steel demand enters the traditional off-season starting this month. June-July are when many regions are subject to high temperatures and frequent heavy rains which undermine demand, Mysteel Global notes.
Mysteel’s weekly survey among the 247 blast-furnace steel companies it checks showed that their capacity utilization for ironmaking increased for a third straight week to 84.4% as of May 31, up by 0.41 percentage point from one month before, showing that Chinese steel producers have been maintaining high output.
Friday’s NBS data also showed that China’s finished steel output surged by 11.5% on year to 107.4 million tonnes in May, taking total production for the first five months to some 480.4 million tonnes, representing a rise of 11.2% from January-May last year, the NBS data shows.
Last month’s production of finished steel was 5.2% higher than that in April, according to the official data, as the mills’ profits were still at a relatively high level – which encouraged them to maximize their production – even though the rise in production costs had impacted their margins to a large extent.
In May, the margins the mills were earning on their rebars averaged Yuan 680.6/tonne ($98.3/t), which was still relatively high although lower by Yuan 117.3/t month on month. During May too, Chinese prices of imported iron ore had steadily increased, with Mysteel’s price index for 62% seaborne iron ore fines climbing by $5.5/dmt on month to an average of $98.7/dmt CFR Qingdao, according to Mysteel’s database.
Domestic production of pig iron in May reached 72.2 million tonnes, the NBS statistics show, higher by 6.6% year on year though the growth had slowed by a marked 3.5 percentage points compared with that in April. Over January-May, hot metal output increased by 8.9% on year to reached 335.4 million tonnes, the data shows.
Written by Nancy Zheng, email@example.com
Edited by Russ McCulloch, firstname.lastname@example.org