Posted on 21 Jun 2023
Crude steel production in eight of China's top ten steelmaking provinces declined on year in May, according to the latest data released by the country's National Bureau of Statistics (NBS). Seasonal factors were blamed.
China's steel market performed poorly in May, impacted by the hot and humid weather, combined with the pressure of weak macroeconomic data, Mysteel Global notes.
For example, China's May Producer Price Index slid at a fast pace by 4.6% on year, according to the NBS.
Meanwhile, the country's Purchasing Managers' Index (PMI) for the steel industry in May also declined for the third straight month to record a ten-month low of 35.2, index compiler CFLP Steel Logistics Professional Committee announced.
As such, both prices and transactions of domestic steel products fell on year during May, which led to the slow production pace in major steelmaking provinces.
By May 31, the national price of HRB400E 20mm dia rebar, a bellwether of domestic steel-market sentiment, was assessed by Mysteel at Yuan 3,680/tonne ($513.3/t) including the 13% VAT, plunging by Yuan 1,106/t or 23.1% on year.
On the same day, spot sales of construction steel comprising rebar, wire rod and bar-in-coil among the 237 Chinese trading houses Mysteel tracks also dropped by 42,929 t/d or 23.8% on year to sit low at 137,099 t/d.
Among those provinces where steel output decline on year during May, North China's Hebei province was still the country's largest steel-production hub, even though its crude steel total posted the second-steepest drop among the ten provinces of 12.31% to total 19.5 million tonnes. Only North China's Shanxi's was steeper.
Hebei's PMI for the steel industry in May was 39.7, well below the threshold of 50 and showing contraction, according to the Hebei Metallurgical Industry Association.
Table-1 May steel output among China's top 10 steel-producing hubs
Ranking | Province/Autonomous Region | Volume (mln t) | Y-o-Y (%) |
1 | Hebei | 19.5 | -12.31 |
2 | Jiangsu | 10.78 | 5.53 |
3 | Shandong | 6.25 | -5.57 |
4 | Liaoning | 5.97 | -5.54 |
5 | Shanxi | 5.77 | -15.81 |
6 | Guangxi | 3.49 | 2.61 |
7 | Anhui | 3.31 | -4.13 |
8 | Henan | 3.28 | -6.04 |
9 | Hubei | 3.08 | -6.77 |
10 | Guangdong | 2.96 | -11.2 |
Total |
| 64.39 | -59.23 |
Source: NBS
In parallel, over January-May six out of the top ten steelmaking hubs across China posted on-year gains in their crude steel production, the NBS data showed.
Table-2 Jan-May steel output among China's top 10 steel-producing hubs
Ranking | Province/Autonomous Region | Volume (mln t) | Y-o-Y (%) |
1 | Hebei | 96.3 | 6.3 |
2 | Jiangsu | 52.76 | 3.89 |
3 | Liaoning | 32.05 | 3.21 |
4 | Shandong | 31.67 | 7.09 |
5 | Shanxi | 28.5 | -3.31 |
6 | Guangxi | 16.49 | 4.86 |
7 | Anhui | 16.03 | -5.33 |
8 | Henan | 15.34 | 6.34 |
9 | Guangdong | 15.27 | -2.02 |
10 | Hubei | 15.02 | -7.6 |
Total |
| 319.43 | 13.43 |
Source: NBS
Source:Mysteel Global
