Posted on 07 Sep 2023
Daily crude steel output among the member mills of the China Iron and Steel Association (CISA) over August 21-31 reversed down from the prior ten days, falling by 7.7% or 169,400 tonnes/day to average 2.05 million t/d, a near seven-month low, according to the association's release on late Tuesday. Many mills had reined in output after their profit margins had been squeezed, sources said to explain the reduction.
However, the daily output in late August was still higher by 0.7% from the corresponding period in 2022, CISA notes.
In late August, prices of steelmaking raw materials including iron ore and coking coal had been steadily rising, and the increases in them outpaced the rise in domestic finished steel prices, a market insider noted, which consequently crimped the mills' profits on steel sales.
For imported iron ore prices, Mysteel SEADEX 62% Australian Fines, for example, moved up by $8.2/dmt from that on August 18 to reach a four-month high of $117.95/dmt CFR Qingdao as of August 31.
In contrast, the spot price of HRB400E 20mm dia rebar in the Shanghai market under Mysteel's assessment, edged up by a smaller Yuan 10/tonne ($1.4/t) to Yuan 3,740/t including the 13% VAT over the same period.
Based on the latest data, CISA estimated the country's daily crude steel output at 2.83 million t/d for late August, or down 5.2% from August 11-20, according to the release.
Meanwhile, the lower output saw finished steel stocks at CISA's member mills also reverse down by 11.5% or 1.9 million tonnes from August 20 to settle at 14.7 million tonnes as of August 31. The volume was also lower by 7.6% on year, the data showed.
China's domestic steel demand did not show any signs of a marked recovery during late August, as the daily trading volume of construction steel including rebar, wire rod and bar-in-coil among the 237 trading houses under Mysteel's tracking nationwide averaged a mere 148,419 t/d in the last 11 days of August, down 7,594 t/d or 4.9% from mid-August.
Source:Mysteel Global
