Daily steel production in China increased by 4.6% in August

According to the latest data from the CISA, daily steel production at enterprises belonging to the China Iron and Steel Association (CISA) recovered from August 11 to 20, increasing by 4.6% or 94,000 tons per day from the beginning of August to an average of 2.14 million tons per day. release on August 25, as some blast-furnace steel plants increased production after refurbishment.

Based on the performance of its member plants, CISA estimated the country’s daily steel production at 2.8 million tonnes /day in mid-August, a 3% increase over the previous ten days. According to CISA, as of August 20, nationwide stocks of finished steel rose by 2.1% or 312,200 tons from August 10 to 14.93 million tons, which is also 28.5% higher than in early 2021.

In contrast, the results of Mysteel’s survey of a larger group of 318 Chinese steelmakers, including 247 blast furnaces and 71 EAFs, differed from those of the CISA survey, as their average daily crude steel production declined from August 11-20. From 1 to 10 August, 1.3% or 37,900 dpi, reaching a four-month low of 2.93 MTPI.

The discrepancy can be attributed to the sample size and the fact that production in electric steel factories has been cut due to local electricity rationing, and many provinces in China, including the three major steel industries, including Hebei, Jiangsu and Shandong, still produce their steel. Production restriction measures, although those that meet ultra-low emission standards, many of which are large and state-owned, are exempt from restrictive measures.

Most of the CISA member plants are large and medium-sized steel mills in China and it is difficult to judge whether their steel production will be sustainable as spot steel prices in China declined steadily in mid-August and the national price was 20mm diameter HRB400E Rebar as estimated Mysteel is down 83 yuan per tonne ($ 12.8 per tonne) from Aug.10 to 5,245 yuan per tonne, including 13% VAT as of Aug.20.

However, in China’s steel mills, the profitability of the steel industry increased as prices of raw materials, in particular iron ore, fell more significantly during this period, and Mysteel SEADEX fines of 62%, for example, decreased by $ 22.2 per ton from August 10 to USD 139.55 per ton CFR in Qingdao through August 20.

Domestic steel demand remained weak by mid-August, as daily construction steel trading volumes among 237 trading houses averaged 175,890 t /d over August 11-20, down just 2,875 t /d in ten days.

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