Pollution curbs in Tangshan lower China’s daily steel output. Key producers’ daily crude steel output fell to 2.271mn mt in early-March, down by 2pc in late-February as Chinese authorities tighten measures to reduce heavy smog in major cities. Compared to a year ago, production in early-March rose by 25.58pc, according to CISA, which compiles production data from around 90 statistically significant steel producers across China.
Production level in year over year comparison is elevated due to a lower base amid the impacted of the COVID-19 pandemic last year.
In early-March, daily production of steel products fell to 2.130mn mt, down by 10.97pc from late-February. Due to production curbs and stricter emission control measures, Chinese mills are focusing on the import of semis, such as billet, and moving up the value chain to produce high-end steel products but at lower volumes. Daily steel products’ output rose by 27pc from a year ago, while Pig iron production was at 1.987mn mt, up by 17.26pc.
| China’s average daily output in early-March (mn mt) | ||||
|---|---|---|---|---|
| Production | Early-March | Late-Feb | Change | Change (YoY) |
| Crude Steel | 2.271 | 2.319 | -2.08% | 25.58% |
| Pig iron | 1.987 | 2.049 | -3.00% | 17.26% |
| Steel | 2.130 | 2.392 | -10.97% | 27.05% |
War on pollution
Seven blast furnaces in the city of Tangshan will be shut this week as local authorities tighten pollution control and warn steelmakers of severe fine for failing to comply with production cut instructions. In February, Tangshan’s municipality launched a pilot program to reduce emissions generated by steel mills by 40pc in 2021, which translates to a reduction of around 50mn mt pig iron and 60mn mt crude steel output in Tangshan, according to local media.
Steel inventories at key producers in early-March fell to 17.889mn mt, down by 8.98pc or 1.473mt from late-February. Inventories are higher by 53.96pc or 6.26mn mt from the beginning of the year.