China’s daily average crude steel production declined to 2.043mn mt in early-August, down by 2.97pc from late-July amid rising inventory levels due to weak demand. The daily average crude steel output is down by 5.09pc from a year, according to the China Steel Association data.
The decline in production reflects strict adherence to the regulator’s guideline to maintain production at levels below 2020 as part of the supply-side reforms. In late-July, CISA members had lowered output by 4pc from mid-July.
|China’s average daily output in late-July (mn mt)|
Daily steel products’ output fell to 1.915mn mt in early-August, down by 9.46pc from late-July, while down 4.16pc from the prior year period. Pig iron production was at 1.832mn mt, down by 2.66pc from late-July, while down by 4.40pc from the prior year.
Steel inventories at key producers in early-August hit 14.622mn mt, up by 808,400mt or 5.85pc from late-July and up by 632,100mt or 4.52pc from the prior year period.
Steelmakers in China are faced with increasing finished inventories at mills and yards. Inventories of rebar across Chinese steelmakers and social warehouses stood at 11.48mn mt as of Aug 12, down 36,100 mt or 0.31pc from a week ago. In line with these sentiments, Jiangsu-based Shagang Steel lowered rebar prices for August 11-20 deliveries by CNY200/mt ($30.8/mt) from early August.