The slower growth was due to the stalling domestic steel market since late January and for most of February because of the outbreak of the COVID-19 nationwide in late January, Mysteel Global notes.
Over January-February, China’s daily crude steel output averaged 2.58 million tonnes/day, down significantly from 2.72 million t/d for last December or 2.73 million t/d for the whole 2019, Mysteel Global calculated basing on the NBS data.
In the first two months, China’s pig iron output grew 3.1% on year to 132.3 million tonnes, which was also slower than the annual 5.3% growth for 2019, while the country’s finished steel production contracted 3.4% on year to about 167 million tonnes, or a sharp contrast to 9.8% year-on-year increase for 2019, as many Chinese steel mills conducted maintenance on their rolling mills over February and March, Mysteel Global understood.
The battle against the pandemic across China since late January has seriously delayed the recovery in steel demand from downstream users after the Chinese New Year holiday and caused serious disruption to the country’s logistics and transportation, and steel inventories, as a result, had built up at both the domestic mills and traders.
Chinese steel mills were forced to cut production, as stocks of the five major finished steel items comprising rebar, wire rod, hot-rolled coil, cold rolled coil, and medium plate at China’s 184 steel mills hit a new high of 13.5 million tonnes as of March 4, or soaring 119.5% on year, according to Mysteel’s data since February 2015.
And the daily trading of construction steel comprising rebar, wire rod and bar-in-coil among the 237 sampled trading houses across China averaged 27,622 t/d over February 10-28, which was far below 100,000-150,000 t/d for a low demand season, according to Mysteel’s database.
China’s domestic steel market has shown signs of improvement since mid-March, as the daily trading volume exceeded 200,000 t/d since March 11.
Written by Nancy Zheng, firstname.lastname@example.org
Edited by Hongmei Li, email@example.com