Daily steel production at 318 steel mills in China continued to decline in early August, while tonnage decreased by another 36,200 tons per day, or 1.2%, compared with the previous eleven days, to 2.96 million tons in day in the period from 1 to 10 August. , the lowest since the end of April.
Of the 318 surveyed plants, 247 blast furnaces and 71 electric arc plants.
Early August results showed that more and more Chinese steel mills are cutting their steel production in line with Beijing’s insistence that steel production in 2021 should be lower than in 2020. At the same time, many regions, including Sichuan and Guangxi provinces in southwestern China, as well as South China’s Guangdong faced power shortages, forcing steel producers in these regions to reduce their capacity utilization.
As of August 5, capacity utilization of 247 blast furnaces fell in the third week to a five-week low of 85.73%, down 1.1 percentage points from the week. This figure among selected 71 EAF factories also declined over the third week by another 4.25 percentage points over the week to a five-month low of 59.8%.
August is still the traditional off-season for steel consumption in China, with high temperatures and heavy rainfall in most parts of the country. Consequently, this is the season where most of the Chinese steelmakers are maintaining their steel plants while demand from end users remains moderate, Mysteel Global notes.
From August 1 to August 10, the daily trading volume of construction steel, including rebar, wire rod and wire rod, among 237 Chinese trading houses monitored by Mysteel averaged 178,765 t /d, up 8,025 t /d from the end of July. but still significant. lower than an average of over 200,000 t /d during peak season.
China’s finished steel prices declined in early August following Beijing’s call for stability in supply and bulk commodity prices on July 30. As of August 10, a national price estimate was made for HRB400E 20mm diameter rebar, which is an indicator of the sentiment in the Chinese steel market. from Mysteel at 5328 yuan per tonne ($ 822 per tonne), including 13% VAT, down 151 yuan per tonne below the recent high on July 30.