China: Crude steel output continues downward trend in Sep'24

China's crude steel production dropped for the fourth consecutive month in September 2024 to 77.07 million tonnes (mnt), falling 1.1% against 77.92 mnt in August 2024 and 6.1% against 82.11 mnt in September 2023, according to data from the National Bureau of Statistics. This marks the lowest production volume since December 2023, with expectations of a rebound remaining unfulfilled.

Meanwhile, during the January-September 2024 period (9MCY'24), crude steel production dropped 3.6% y-o-y to 768.48 mnt.

Steel exports touch 8-year high

In contrast, China's steel exports surged 25.9% y-o-y to 10.153 mnt in September, exceeding 10 mnt for the first time in eight years. This sharp increase was also 7% higher m-o-m, compared to August's 9.49 mnt. The robust export growth was driven by improving global demand and competitive pricing.

Domestic market recovery

Domestic steel prices rallied in late September, driven by positive market sentiment and an uptick in restocking by end-users ahead of the National Day holiday. Steel sales in the spot market also recovered, supported by the interest rate cut by the US Federal Reserve and Beijing's stimulus measures.

Capacity utilisation rate improves

By the end of September, the capacity utilisation rate among 247 blast-furnace mills increased 1.49% m-o-m to 84.45%, according to Mysteel's survey. Meanwhile, the rate among 87 electric arc furnace (EAF) mills jumped by 13.12% to 43.65% during the same period. Some Chinese steelmakers ramped up production in the second half of September as profit margins improved.

Outlook

China's steel sector is likely to experience continued volatility in the short term. While exports may remain robust, domestic demand and production levels will depend on the effectiveness of government stimulus measures and global economic trends. A rebound in crude steel output is possible in the coming months, driven by improved capacity utilisation and stabilising economic growth.