China: Crude steel production continues to fall m-o-m in Nov'23

China's crude steel production fell by 3.8% m-o-m to 76.1 million tonnes (mnt) in November 2023 against 79.09 mnt in October 2023. However, production edged up by 0.4% y-o-y against the same month of 2022, as per data from the National Bureau of Statistics (NBS).

During January-November 2023 total output increased by 1.5% y-o-y to 952.14 mnt.

On a daily average basis, crude steel output fell the lowest since December 2022 to 2.54 mnt during October, down by 0.5% from 2.55 mnt in the previous month.

A combination of low margins and slowing demand has caused steel production to decline for the fifth consecutive month. This has dampened the spirits of many steelmakers, leading to reduced production activity.

Moreover, pollution crackdowns in north China further hampered steel output, with stricter and broader production curbs on mills.

Tangshan is leading the charge on environmental responsibility, aggressively curbing "two high" projects and pushing for better environmental outcomes in steel, coking, and other critical sectors.

China's dominant blast furnace steelmakers grappled with their fifth consecutive month of declining output in November. Mysteel data reveals utilization rates sinking by 3.1% m-o-m to 88.61%, further squeezed by shrinking profit margins.

While traditional blast furnaces struggled, cleaner electric-arc furnaces (EAFs) saw a surge in activity last month. Fubao data shows EAF utilization rates jumping from 67% in October to 86.5% in November, fueled by improved profits.

Outlook: Combined factors like winter weather impacting construction activity and the typical December maintenance shutdowns at steel mills are expected to further dampen steel output in the coming month.