China’s daily average steel output recovered to 2.193mn mt in mid-July (July 11-20) a rise of 2.62pc from the early July period with steelmakers normalizing production after the cuts imposed for centennial day celebrations.
In mid-July, crude steel production was up 2.59pc from the prior year, according to China Iron and Steel Association (CISA) data. But stringent production cuts and the focus on steel price regulation are expected to reduce the gap between current production levels prior year production through H1 2021. China’s National Development and Reform Commission is keeping a close eye on steel production in various provinces and has directed steelmakers to make sure their H2 production does not exceed last year’s H2 output.
In addition to the 30pc production cut in China’s steel hub Tangshan, mills in major steelmaking provinces including Jiangsu, Fujian and Yunnan are also directed by authorities to lower their steel output in H2.
| China’s average daily output in mid-July (mn mt) | ||||
|---|---|---|---|---|
| Production | Mid-July | Early-July | Change | Change (YoY) |
| Crude steel | 2.193 | 2.137 | 2.62% | 2.59% |
| Pig iron | 1.908 | 1.860 | 2.63% | -0.01% |
| Steel | 2.126 | 1.962 | 8.35% | 4.29% |
Daily steel products output has increased in mid-July to 2.126mn mt, up by 8.35pc from early July to benefit from higher steel prices due to tight supply. Steel products output was also up 4.29pc from a year ago.
Key steelmakers produced 43.282mn mt crude steel in the 20-day period (July 1 to 20) at an average daily output of 2.164mn mt, which is 7.31pc lower than the prior month and up by 0.26pc from the prior-year period.
CISA estimates China’s overall daily average steel output at 3.05mn mt in mid-July, up by 2.09pc from a year ago and up by 2.36pc from the prior 10-days.
Steel inventories at key producers in mid-July reached 14.91mn mt, up by 860,500mt or 6.12pc from early July and up by 1.152mn mt or 8.37pc from the end of June. Inventories rose by 536,000mt or 3.73pc from the prior-year period.