China: Steel inventories at CISA-affiliated mills rise in early-Jul'24

The China Iron and Steel Association (CISA) reported total steel inventory of key enterprises in early-July 2024 at 15.402 million tonnes (mnt), up by 708,000 tonnes (t) or 4.82% compared to 14.694 mnt in late-June. However, inventory fell by 683,700 t or 4.25% m-o-m against 16.086 mnt in early-June. Furthermore, the same decreased by 495,800 or 3.12% y-o-y compared with 15.893 mnt in early-July 2023.

Production volumes

The average daily crude steel output of CISA-affiliated mills stood at 2.151 mnt in early-July 2024, a decrease of 0.73% against 2.168 mnt in late-June. Moreover, output declined by 4.3% m-o-m compared to 2.248 mnt in early-June. Furthermore, output moved down by 3.97% y-o-y against 2.240 mnt in early-July 2023.

The average daily finished steel output stood at 1.979 mnt in early-July, a decrease of 13.35% from 2.284 mnt in late-June. Moreover, production edged down by 5.72% y-o-y.

The average daily pig iron output stood at 1.925 mnt in early-July, down by 0.62% against 1.937 mnt in late-June. Moreover, production fell by 4.67% y-o-y.

Outlook

The slight rise in inventory and the decline in production suggest a potential softening of demand. This could be due to various factors, including a slowdown in Chinese construction, a major steel-using sector. If demand continues to weaken, steel mills may further reduce production to avoid excessive inventory build-up.