China: Crude steel production continues to decline m-o-m in Oct'23
China’s crude steel production declined by 4% m-o-m to 79.09 million tonnes (mnt) in October 2023 against 82.11 mnt in September 2023. Moreover, production fell...
China's crude steel production declined by 4% m-o-m to 79.09 million tonnes (mnt) in October 2023 against 82.11 mnt in September 2023. Moreover, production fell by 1.8% against the same month in 2022, as per data from National Bureau of Statistics (NBS). However, during January-October 2023 total output increased by 1.4% y-o-y to 874.7 mnt.
On a daily average basis, crude steel output stood at 2.55 mnt during October, down by 6.8% from the previous month.
Chinese crude steel production has been declining for four consecutive months, with an increasing number of steelmakers scheduling maintenance amid shrinking profit margins and unfulfilled expectations for demand during the peak consumption season.
Specifically, the deepening decline in steelmakers' margins has forced some companies to initiate annual maintenance of blast furnace units earlier than planned, leading to a decrease in production output in October.
The blast furnace (BF) capacity utilisation rate among the 247 Chinese steelmakers under Mysteel's regular survey has dropped for the third consecutive week to reach 90.62% over 13-19 October, with the decline at a faster pace of 1.31 percentage points from the prior week.
Moreover, Chinese government has been imposing production cut in order to reduce carbon emissions and over production. These measures include production quotas for steel mills and restrictions on blast furnace operations.
Outlook: With only a few months remaining in the year, several steel mills in various regions have made the decision to suspend production until the new year, a move attributed to the combined effects of steel output control policies and sustained margin pressures.
As anticipated, the number of mills undergoing maintenance and production cuts is expected to rise which may lower production volumes in the short term.