Steel production in China fell to a 15-month low in July, according to Bloomberg calculations, as the industry begins to fulfill its promise to cut production below last year’s record levels to limit emissions.
According to the National Bureau of Statistics (NBS) on Monday, the world’s largest producer produced 86.79 million tonnes of steel last month, down 7.6% from June and 8.4% from 93.36 million tonnes in July 2020.
Average daily production last month was 2.8 million tons, according to Reuters calculations based on NBS data, down 11% from 3.13 million tons per day in June.
According to Fastmarkets MB, the 62% iron benchmark imported to North China changed hands at $ 163.52 a tonne, up 0.6% from Friday’s close.
Since late June, Beijing has sent inspection teams to local governments and factories to check if steel and production are being cut, obsolete blast furnaces are being closed down, and production is being curtailed at highly polluting factories.
“We must focus on reducing crude steel production in companies with poor environmental performance, high energy consumption and outdated technology and equipment … and ensure that crude steel production in 2020 is reduced from a year earlier,” said the China Iron and Steel Association. statement.
The association and analysts expect steel demand in China to decline in the second half of the year due to a slowdown in construction and continued limited semiconductor supplies, which are limiting production and demand for metals in the automotive sector.
China produced 649.33 million tonnes of steel in the first seven months of the year, up 8% from the same period a year earlier, according to the Bureau of Statistics.
“We are seeing the cumulative effect of China’s decarbonization efforts and uncertainty due to the coronavirus and global chip shortages,” said Tommy Xie, head of Greater China research at Oversea-Chinese Banking Corp.